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How Web Advertising May Go
Anti-Globalism sends us to Ars Technica for Jon Stokes's musing on the falling value of Web advertising. Stokes put forward the outlying possibility — not a prediction — that ad rates could fall by 40% before turning up again, if they ever do. "A web page, in contrast, is typically festooned with hyperlinked visual objects that fall all over themselves in competing to take you elsewhere immediately once you're done consuming whatever it is that you came to that page for. So the page itself is just one very small slice of an unbounded media experience in which a nearly infinite number of media objects are scrambling for a vanishingly small sliver of your attention. ... We've had a few hundred years to learn to monetize print, over 75 years to monetize TV, and, most importantly, millennia to build business models based on scarcity. In contrast, our collective effort to monetize post-scarcity digital media have only just begun."
.. but unfortunately just doesn't seem to be.. these are some of the major failings I see in online advertising today:
Inconsistency! This to me is a huge one. Back in the day.. you'd be surfing your favourite site.. and you'd see the same ad over and over. Every day, there it would be. Sooner or later you'd get curious and click on it.. and the odd rare time, you would find a product that generally interested you. You don't see that any more. Now every time you visit the site.. a completely different set of random ads shows up. There is no longer that cumulative curiosity.
Relevancy! Ok.. google's adsence has made a lot of headway in this area... but automated tools (even really freaking complex ones) simply can't replace a web aster finding a product on his.her own that he/she feels visitors will want.
Slow freaking ad servers! Back in the day (cough) .. the ad was hosted on the same server as the rest of the page. Users didn't have to wait for some slow overloaded ad server.
Only getting paid on "confirmed purchases". To me this is a rip of for webmasters. The few times I have bought something I saw advertised on a web page.. I didn't access it through the ad. I googled for it later when a need for such product arose. Ads don't usually have an immediate effect imo .. they are cumulative. You see a product name over and over.. and eventually decide to buy it. You see the same ad for some web host every time you visit a site.. then one day you need web hosting.. and the name pops up. Chances are you are not going to go click on the ad.. but non the less the ad was effective.
Just being freaking irritating. The latest craze is these hover over links. Every time I see one.. I feel like heating up a steel spring with a blow torch, then carefully sliding it up the webmasters nose. Stuff like this encourages people to install ad blockers. Back when ads were un-intrusive.. most people didn't bother with ad blockers. Now though.. browsing the web without some kind of blocker is an experience in pain... and unfortunately the nice ads that don't annoy users get blocked along with everything else.
Anyway, that is enough drunken 3am rambling!
You need only to check http://www.google.com/services/ to see that they offer more than just ads. Our intra net uses the google appliance to power our internal search engine for instance.
What I fear is that due to this, websites will end up having to host more intrusive ads (interstitials, the whole website being a Flash object that demands not just Flash enabled but the saving of shared objects) for the same money, as well as more code to try to block ad blocking programs (which makes it worse long term as people go elsewhere for similar content.)
Even now, a good number of Web forums will insta-ban someone just on the mention of Adblock and NoScript because the sites are so desparate for revenue.
Long term, I wonder if the solution is a page click clearinghouse, where people pay a central subscription center (in return for no ads and other membership benefits to all subscriber websites) which pays websites by how many pages that user browses from their account. Essentially, similar to how Slashdot does its subscriptions, except with member sites getting paid per view.
We've had a few hundred years to learn to monetize print, over 75 years to monetize TV, and, most importantly, millennia to build business models based on scarcity.
thing is, there's no scarcity any more, or, I should rather say, the scarcity is not in the resources themselves, but rather on the sharing of the token called money used to obtain goods and services.
The current monetary system based on debt creates virtual scarcity, and doesn't really mean anything anymore. it's time to evolve.
http://thezeitgeistmovement.com/
I tried to let the model work, but after they finally started using Flash tricks to display pop-ups, I finally used the "nuclear option". Whats that? The hosts file. I call it the nuclear option because it takes out unobtrusive ads along with the nasty ones. I really didn't want to do it, but the web advertising industry left me no choice.
If major web sites ever decide to adopt a code of ethics, whereby additional window spawning, interstitials, and other obtrusive ads are barred, I'll stop using hosts.
Really, it worked fine for dead tree print guys, there's no reason it can't work for you. I don't even mind cookies. It was actually kind of cool when Yahoo started showing me ads for IC chips and network cards. Maybe they're still trying to do that, but I'll never know; because some worthless X-10 popup weenie is being blocked by my hosts file.
Get it? Is ANYBODY listening?
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
That assumes you even saw, or had the ability to see the ad in the first place. I block popups, surf anonymously via a disposable OS (virtualization), and use Firefox with Adblock Plus. My exposure to actual advertisements is extraordinarily minimal. I almost forgot they existed till this article came out.
Most people are not much different either. I suspect the value of the web advertisement is going down because the number of eyeballs actually seeing them is in a free fall. When advertisement campaigns cannot deliver any meaningful increases in sales or leads then their value must go down.
If people are not seeing the ads, how can it possibly lead to a sale, lead, click-thru, click-on, whatever, blah blah blah
I always get a kick out of these sorts of articles.
Advertising on the internet comes from the same premises as advertising anywhere else. Either you are building awareness or you are inciting the viewer to action, preferably both.
You buy ads based solely on if they are acheiving those two objectives. The value of an ad is from that alone. If your ads don't perform, pay less or stop. If they succeed, keep paying or even pay more to guarantee that they will continue to do so.
Sure, you can do interactive ad games, popups, popunders, little folding corner things, etc, but who cares unless your name sticks in their mind or it causes them to buy your stuff.
Sure, website operators will plaster their pages with ads, but who cares as long as your name stands out and people buy your stuff.
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The main benefit for online ads over any other kind of ad is that the advertiser can have enormous feedback on the success of the ad that would normally take hundreds of hours of focus groups and thousands of dollars of wasted money.
The key failing of online ads is that advertisers are morons that think that internet ads are some magical moneymaking device that will work by itself. You have to use that wonderful deluge of information to guide your purchases and campaigns.
If advertisers, as a whole, stay ignorant, the market will boom and crash. Just like ignorant stock traders, just like any herd of morons that think they've found a golden goose and then cook it.
I've been surfing the web for at least 12 years. I've probably hit dozens of ad-infested pages per day during that time. I've probably seen tens, if not hundreds, of thousands of ads.
I can't remember a single time when I actually purchased something because of a web page ad.
I may have been influenced a bit due to a few of them, but actual purchase that I wouldn't have made otherwise? If so I have forgotten about it.
I ignored whatever it is you just said. You're probably used to that though.
Has left pretty well all these Ad merchants behind.
If I'm browsing some site in say the USA and I'm based in Europe I don't give a **** about ads for US services (and most products come to think of it). They just don't have any relevance to me whatsoever and just consumes the bandwith/download quota I PAY FOR every month.
Very few sites check your IP for location and serve you up an Ad free page if you are outside their target location on this wonderful planet of ours.
Don't get me started on the ever increasing number of sites that are replicating the sort of things that doubleclick does. Last month I added 78 new ones to my hosts files to block.
AFAIAC (As far as I am concerned), these people are signing their own death warrant. Eventually people will say 'Enough is enough' and start browsing only those sites with a reasonable (or zero) levels of ads. One site I visited recently had over 20, yes 20 other sites it was pulling ads and other crap from. Why do they do this? Greed obviously.
This business model is surely untennable for the future. Sorta like the 'sub-prime mortgages' that were sold to far to many inappropriate people.
I'd rather be riding my '63 Triumph T120.
Lots of confusion about terminology.
Half the people here didn't understand the article, the other half believe it was about something else based on the summary.
This was about the reduction of traditional advertising budgets (a rehash of stats) with a non-sequitor on how it might affect advertising online (with no stats).
Did they even think to mention that the money has simply shifted from print/tv media to online?
No, this is largely a attempt at fear-mongering about the economy.
I don't know how many different extensions and add-on installs I've added to FireFox but I know off the top of my head that the overwhelming majority of them are designed specifically to eliminate or block advertisements.
And by advertisements I am not just limiting the scope to pop-up ads, but google ads, banners, and ad sponsored links and polls.
Any image that is from an ad shows up 404, every pop-up is blocked, and any link to an ad shows up 404 including sites that redirect to advertisements.
The less ads the better the internet experience is. I am not sympathetic at all to advertising and spam-marketing companies when there revenue falls.
Audience attention is still scarce -- the Internet hasn't changed this.
Print, radio and TV all had high fixed costs. As a result, the number of advertising space suppliers was low. When suppliers -- in this case, websites -- increase, supplier power decreases relative to buyer power. Prices fall.
We spend a few hundred a month on Google Adwords (both on search results pages and the 3rd party "content" pages) on a fairly niche set of terms for our web based bingo card generator. I've noticed recently that our bids, which I haven't changed in months, have bought us both higher ad placements and lower costs per click. Similarly, the advertising revenue from the publisher side of AdSense (ads we show) on the same website have dipped a bit. All of these hint that other people have pulled out of the market. Granted, you have to take this with a grain of salt -- we're in a very niche market.
Still, it doesn't take a rocket scientist to realize that in this economy, overall, more people are going to cut back on advertising budgets rather than expand. I think that in the case of Google, it's hidden by their growing market share and the growth of the Internet.
Anyone care to guess why Google's CHROME has no ability to use plugins/add-ons?
(And, I'd actually use Chrome if I could BLOCK THE DAMN ADS!!! Who cares if Chrome renders this well and/or is faster... CAN IT BLOCK ADS??, No?... OK! Fine... So, where's my FF icon? )
Therefore I use FireFox 3.x with NoScript, AdBlock Pro, and Flashblock installed...
(Sure, I find myself whitelisting certain sites often... but that is the way it should be!)
Try reading certain sites with IE7 at netbook resolutions and you will love FF with the ad killing plugins/add-ons....
I've been on the other side: setting up Google ads for two small companies. In one case, it did increase the web-traffic, but did not result in a single sale. In the other case, it has resulted in sales - but the total effect was very minimal.
This was with Google ads - which I suspect are among the most effective, because they are generally relevant to what the person was searching for. Even so, the results were marginal at best.
Web advertising would be more effective if there were less of it. Unfortunately, dropping prices mean dropping revenue, which will probably cause some sites to add even more adverts. Resulting in even less value, further price and revenue drops, and a vicious cycle is begun.
Even though all attempts to date have failed, I still think an effective micropayment system is the right answer...
Enjoy life! This is not a dress rehearsal.
http://www.naturephoto-cz.com/photos/birds/great-tit-3066.jpg
http://www.nbstreams.com/pic/pipe_fitting/bras_pipe_fitting/big/07b008_brass_hex_nipple.jpg
http://www.tailored.com.au/uploaded_images/ass-758565.jpg
Most people who have are ashamed to admit it.
Advertorial isn't a problem.
People don't want to read advertorial, sites employing advertorial become useless and folks will stop reading them.
And yes, blocking will win the race because all they have to do is download the ads and not display them, then the server really is none the wiser. Unless you get into all sorts of crazy technology like embedding client-side javascript that validates the page layout before loading up the content, or some such thing.
Still, in the end it's the person controlling the browser (end-user) that has the power here. This is a fundamental difference from television, and one I really like.
(alright, I know, I can turn the tv off...)
It would seem that the market wonders that too; GOOG has lost 51% of its value over the last 12 months. Compare to Microsoft (MSFT), which even with the Vista debacle was down by less (41%) over the same time period.
Read my blog.
So the page itself is just one very small slice of an unbounded media experience in which a nearly infinite number of media objects are scrambling for a vanishingly small sliver of your attention.
That's marketing drivel. What it really means is: "The stuff that the user came for is being pushed aside by more and more and more aggressive advertisement."
Geez, wonder if that just might be one of the reasons that more and more people block ads?
The whole advertisement industry needs to get one important fact into their heads, and that is that nobody wants their crap. Once they've realized that, and start working on a way to push it out in ways that people don't mind enough to block and filter, the value of ads might increase again.
However, for the past 20 years or so, the solution to every advertisement problem has been "more ads". These days, when you walk down McDonalds street, past the AOL stadium, on your way to the Powered by IBM subway, you pass more ads than you'd have seen in an hour or two when you were young. But I said "pass", not "notice".
I remember times when the local stadium was named for its team, not some random company, when there were things that were not being "presented by" some logo, and when you could watch TV for 30 minutes straight without one advertisement.
Fact of the matter is: Advertisement has changed. It's a lot about brand recognition today. The problem being that there are hundreds, if not thousands of brands that compete for your recognition, and they compete by trying to scream louder than the others.
On the web, we can filter them, and the louder they scream, the easier it is. That's why what is really a global advertisement business crisis shows up as a problem in web-based ads first.
Assorted stuff I do sometimes: Lemuria.org
I live and work in technology in New York. Back in the day I built e-commerce sites, but post dot-bomb I perforce moved into advertising. And as a consultant I have sat in the meetings with the tastemakers in many of the biggest Ad firms, such as McCann-Erickson (makers of the Mastercard "Priceless!" Ads), Ogilvy & Mather, JWT, etc, so I have some perspective on the question of web advertising.
First, let's get the common perception of an overarching, sinister council meeting in smoke-filled rooms to figure out how to manipulate the minds of America out of the way. The tastemakers are hipsters, almost all White, almost all male, in their 30's or younger, and far fewer of them are gay than you would think. They are voracious, almost desperate consumers of popular culture and are nearly all filled with self-loathing because they work in advertising instead of producing any of that popular culture.
At the moment they're all desperately trying to figure out how to monetize online, mobile, and gaming because print is terminal; out-of-home (that's billboards, bus shelter posters, etc) is limited; and the only people who still watch TV in respectable numbers are the least desirable demographic, that is, Baby Boomers in their 50's and 60's. The trendlines for middle-to-upper-middle income males ages 18-45 all show that they're abandoning in droves the activities that have been the mainstays for decades, such as TV watching and sports. So clients are demanding that Ad firms present them with good digital strategies.
But they are woefully ill-prepared to do so, because within the Ad agencies themselves the TV crowd still rules the roost and so does their "you'll take what I give you and like it" mentality. They do not fundamentally understand that within the digital media consumers have vastly more ability to shape what content they see, and how they see it. That is, they do understand that in digital consumers have that ability, but they have no idea what to do or how to behave in that brave new world.
Instead, they double-down on the same old tactics of interruption ("we'll be right back after these messages!"). That's why when TiVo got big advertisers responded by putting those annoying banners at the bottom of the screen during shows, and by making every show a walking product placement; you cannot TiVo those out. And at the moment they're on the eve of hammering the final nail in the coffin of the TV medium by forcing their last demographic, the Boomers, to switch their sets to those able to receive a digital signal. Little do they realize that will make it exponentially easier for consumers to edit out all of the banner and product placement crap and re-post and share them through P2P, while also alienating the elderly who might just remember that they used to play golf and bridge instead of watching TV all night.
That's why it's easy to predict which way web advertising will go: it will be relevant to the consumer's needs, or it will die. There is no place for the interruptive, one-way communication that the TV crowd in the Ad agencies are trying to push, because consumers can very easily switch all that off with AdBlock and the like. One-way, interruptive will not survive on the web, it will not survive on the mobile platform, and it will not survive in gaming. The days of forcing males, 18-45, to sit through tampon commercials are over.
Google has made some progress on serving relevant ads with AdSense, and they have prospered accordingly. But the problem lies deeper than the medium through which commercial messages are delivered. The corporations of the world, at least the ones more than 20 years old, still want to live in a top-down, command-and-control environment where they call all the shots. They want to produce goods and services that people will pay for, but they do not want the rabble to actually talk back to them.
But in digital media, that's precisely what consumers have grown to demand under the democratizing influence of the Web. They demand a
Do what you can, with what you have, where you are.
Unless we move to a totally amateur system, there needs to be some way for professional publishers to get paid for their work.
The only method that avoids any conflict of interest is if the consumer of the media pays directly for its use. But the subscription model is breaking down as the web democratises publishing. Only a suitable micropayment system can save it.
Other ways of funding media are either becoming unsustainable, such as pushing distracting ads, or potentially compromise publishers' independence (negotiating advertising directly with product makers, or receiving revenue from (rarely disclosed) affiliate relationships).
I'm in favour of funding professional media by bonuses that product makers pay for the help they give to consumers, done in a way that is both fully-disclosed and buffers media from dealing with the bonus payers. Here's a summary.
There are ads that appear with search results, which are valuable to both advertiser and reader. And then there's everything else, which is merely annoying.
Search ads are valuable because they're presented when the user is looking for something and are relevant to the search. At that one moment in time, an ad isn't an interruption of other activity. That's why Google is so successful.
Google ads on other sites, though, are mostly noise. The overall quality of Google contextual advertisers is low. For most serious advertisers, opting out of the Google Content Network, but keeping the search ads, is a good move. Especially since the discovery that 10% of users generate 50% of the clicks, but don't buy much.
Online ads may bring in enough revenue to keep your blog running, but they won't keep your car dealership afloat.