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2005 The Turning Point For Online Ads
An anonymous reader writes "Google's advertising sales vice president, Tim Armstrong, said this week in an interview that 2005 was the turning point for online ads. Older businesses went from trying out the internet as an advertising venue to investing full-on." From the article: "'The experimenting and testing phase begun in the 1990s has ended. Corporate ad buyers are investing now,' he said. Jupiter Research estimates the U.S. online advertising market will grow 28 percent over last year, to $11.9 billion in 2005, moving to $13.6 billion in 2006 and $15.1 billion in 2007."
They always go to great lengths to point out that ad spending is increasing, yet never make any statements about how effective all this money being spent is. They're throwing cash into this black pit because everyone says to, but how many companies are actually experiences increased sales from onling ads?
Turning point indeed. In financial terms, this is called an "imminent crash."
Can anyone give any real-life examples of offline vs online advertising profits? What costs more? What pay's off more? Which one is better targeted?
Targeting of customers by major brands is obvious. The main challenge is accessing the local market. Finding a central portal/site where consumers from a certain neighbourhood visit is the main challenge for the local business who lives off walkin traffic.
The online advertising is so successful because it allows any company big or small to get recognized for as little or as much money they want to spend. If you look at how adwords functions, it allows you to bid on keywords to get your ads placed on sites with Adsense. Sure, some keywords get very expensive, but in general the prices are reasonable. Now with other companies like Yahoo getting in on the action, this will drive prices down. What's key here is how effective these ads are or are not. Everywhere you go, my site included, has Adsense. I bet many people click on the ads not even realizing they were ads, thus diluting them a little. But the fact that they are content based, does make them effective. This is the future for now and the kinks will be worked out. Let's just hope tv shows start using adwords so we can get rid of commercials :)
gasmonso http://religiousfreaks.com/> It's only a matter of time before non-tech savvy grandmas and the like are going to start
> using Firefox in order to cut through the craptastic ad-laden world that is viewed through IE.
Hopefully this will yield 'better' advertising.
That is, targetted, on-topic, acceptable, and possibly even helpful (ie. Google style); as opposed to bigger and more obnoxious graphics desparately trying to grab your attention.
On a computer or under a hood.
So while ads are reasonably effective again right now, it'll crash again, because website owners are just cluttering their sites with too damn many of 'em.
The company I work for has learned, and is maintaining a reasonable number of ad spots on our site. Others would do well to do the same. But I guess that goes against the current trend of dangerously short sighted business practices.
Sticking feathers up your butt does not make you a chicken - Tyler Durden
hopefully it will lead to less advertising, so money put into marketing can be put to actual productive use.
No one can understand the truth until he drinks of coffee's frothy goodness.
--Sheikh Abd-Al-Kadir, 1587
I know not all overlays are Flash based but the pros of uninstalling certain browser plug-ins far outweigh the cons.
crazy dynamite monkey
> hopefully it will lead to less advertising, so money put into marketing can be put to actual productive use.
I'd prefer it lead to more effective advertising which in turn leads to less (wasted) advertising.
Reducing advertising as a whole may have other ill effects.
For instance, many content-providing web sites gain most if not all revenue from advertising. A reduction in advertising may affect such sites.
On a computer or under a hood.
First, I have grown accustomed to ignoring online ads. I have NEVER clicked on an ad, and by extension bought something from a web site in that manner.
I have also dabbled with creating a website using ads and can safely say I am not making any of that $12 billion. Again, few people click thru an ad and buy a product. In fact, browsers like Firefox ship with the default setting for cookies to delete them after exit from the app, or at least this option is available. This means that many websites using cookies to track performance of ad clicking won't work for a lot of users.
Also, their is more public outrage about online advertising and many products are being offered to combat this pervasive nuisance. Pop-up and ad blockers are being integrated into even Internet Explorer and those savvy enough are using Firefox which handle them better. I use Norton Internet Security with the ad blocking enabled. Anyone with Linux skills can setup a proxy server that will only serve context stripped of advertising. Obviously, there is a big market for people wanting to avoid online advertising.
Who is saying online advertising is working, Google that gets paid to put ads up regardless of whether they actually generate sales, or the people advertising reporting that ads are actually drawing people to their websites (directly) and making purchases (directly).
In my opinion, online ads are becoming ineffective as people strive to ignore or block them.
I haven't thought of anything clever to put here, but then again most of you haven't either.
If you're on a Windows machine (as a lot of people are), I recommend AdMuncher. I'm a paying customer, and its worth every dime. It serves as a kind of dynamic web proxy and rewrites using the best set of rules I've yet found. Ads are effectively eliminated with very few other issues, all rectifiable with a quick right-click. I used to use a hosts file, and deal with some annoying issues because of it - this works an order of magnitude better. And it comes with (IIRC) a 30-day free trial.
I wonder if they advertise?
You're special forces then? That's great! I just love your olympics!
While I can't comment much on how EFFECTIVE advertising online is, I have noticed in my home audio recording based community that there has been a significant increase by the industry in advertising on my site, and I presume others in my space. 2005 was pretty interesting, I was contacted by many manufacturers over the year, and now that it's toward the end of the year, many of the manufacturers I did enter into agreements with have now started talking to me about re-upping for next year, so really, I can only assume that the advertising has been effective for them.
But then, there are some companies that throw money at things without watching exactly where it goes...so it's anybodies guess...but since it's my site, I would like to think it's cuz my site sells stuff for them :-)
Bottom line: What I do know is 2005 interest picked up a lot, and they want to reup for 2006, with more companies wanting in...so, well, I see validity in the article.
dB Masters
I am very surprised to hear this. I personally have only seen a handful of adverts on the web in the last few months - this is because I use firefox and adblock as well as a few other tricks. And I help everybody I know to do the same.
The truth is - most people despise adverts because they are deceptive, annoying or irrelevant (and quite often all). When I buy things it is often despite having seen an advert for it; that is how I feel about the kind of advertising we are presented with, and I think many feel the same. When I want to buy anything more expensive than a bottle of milk, I first research what my options, find what I need and where it is cheapest - then I buy. Adverts don't enter into it, unless you count such things as catalogs that you pay for. And that illustrates the difference between reality and the fantasy if the advertisers: my research presents me with the information I want, whereas advertising is in your face, disruptive - and highly unwelcome.
What I find particularly strange is that what you would have thought was otherwise sensible businesses keep doing this when it so obviously alienates a lot of people.
You personally might not be affected by advertising, be it web-based or traditional, but in one way or another the majority of consumers are. Be it due to hectic lifestyles, demand for the immediate satifaction of owning a product they just "KNOW" suits their every need, or sheer ignorance, people by the bucketload are more then willing to let their purchasing decisions be swayed by the advertisments they see everyday.
Even those who pay no attention to advertising themselves are at least indirectly affected. Word of mouth is a powerful influence in buying decisions, but without an initial userbase built upon at least some degree of advertising, this is not possible.
At the end of the day, advertising exists because it is effective. And we all know, in this capitalist society of ours, if something isn't effective it generally doesn't last long (not without a good advertising campaign anyway!)