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Internet Ad Network Commentary
Jonas Acres writes: "Lowtax of the [in]famous Something Awful has posted a commentary on the future of Internet advertising. It's a pretty interesting read. He's bounced from dying ad network to dying ad network, so he has a decent platform to preach from." I've also had to deal with a number of ad networks over the years - both for Slashdot prior to the Andover acquisition and a couple of other projects. It definitely sucks. Companies that break contracts, don't pay you, and never getting any return phone calls or anything is the norm that I dealt with.
and agree with Taco and others. Some form of advertising must be found that works on the Internet. If not, the Internet will become a much more boring place. Here's why:
/., something aweful, fuckedcompany and tons of others. This really isn't possible to do anywhere else and garner a large audience. It isn't likely, for example, that there could be a /. TV show. The problem is that as these sites become more popular, they become more expensive to run. Slashdot wouldn't do too well on a $29.95 Interland account. If advertising isn't around to pick up the bill (or at least some of it) then the site owners must somehow make money or just watch their business be crushed under it's own weight. Sell something you say? Well, if all of my time is spent dicking around filling orders or processing returns, there isn't much time to code, parse story submissions or write content. In any event, it's not clear that "selling something" is a panacea either. In short, people expect that there will be new articles on their favorite website and if the flow of new stuff stops, so will the flow of visitors. In my market segment, DIY home improvement, most of the retailers that "sold something" have gone bust: irenovate, cornerhardware and others. They "sold something" and had decent content. It didn't stop their slide into oblivion.
On the internet it's possible to build quirky, interesting sites like
"Well, fuck 'em then, they couldn't figure out a business model that works, let 'em go bust!" you say. Well, it's an easy thing to say but the reality of the Internet is that people come here to find free information. Plain and simple. The internet as an "entertainment medium" like TV just hasn't taken off. Sure, there's some funny and interesting stuff but that doesn't appear to me as the primary reason that people are getting online. It's for email (pretty much free) and to find stuff. This "stuff" is content. It's the reason you're on slashdot right now and it, too, is free. If the smaller content companies can't find a way to turn a buck, the Internet will devolve into the same colorless, odorless, tasteless content we are now force-fed on TV and every other medium. Each company that fails (aside from the clearly ridiculous) are another body on the bonfire and at some point, advertisers will get tired of the smell and leave. Hopefully we find something that works sooner than later.
The real problem with advertising, and especially online advertising, is that people have gotten so inured to it that nobody pays any attention to it any more. In other mediums this isn't quite so much of a problem - there are always new places and ways to attract attention, and innovative ploys by advertising companies still attract a fair amount of attention.
But who really looks at banner ads any more? They're so ubiquitious that they've become part of the background, and the amount of clickthroughs they're generating compared to the number of impressions is rediculously low. So of course all of these companies are going out of business without paying people.
I see this as a worrying trend though. There are plenty of really good sites out there that are supported solely through advertising rather than subscription or per-use charges, and if online advertising dies then many of these websites will disappear as their owners cannot afford the cost of hosting and bandwidth. It also doesn't help when people use things like Junkbuster to further eliminate any chance these companies have of making money.
At this rate it seems like the majority of free sites will either vanish or start having to charge for their services. I can easily imagine a day in the not-so-distant future where even /. has to start charging people in order to pay for the costs of running a website with hundreds of thousands of readers...