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.

Re:The problem with advertising

In truth /. kind of has it right as most of the ads are very targeted (I said most and yes the anitrust ads were just awful) but many times the ads on /. are for stuff I might really look at and therefore my clickthrough rate here is many times what it is on other sites (one or two a month) and I don't mind seeing most of them. But some other sites (debianhelp.org) have some of the oddest ads for a tech site and I do block them through my firewall at home. So I think like most other mediums those that understand who they are talking to will continue to do fine and those who don't will either get a clue or go away.

Re:The problem with advertising

It's now possible to prevent tracking while still seeing banner ads--for example, Netscape 6's ability to allow or disallow cookies on a site-by-site basis.

Re:Lowtax, Something Awful, eFRONT.

>The audio ads are getting over a %5.00 CTR.

How many are real clickthroughs and how many are people frantically clicking for anything near the ad that resembles a "stop" button to get the fsckin' thing to shut up so they can continue to listen to the MP3 they had as background music?

(If I want your web site to make noise, I'll rub my moistened finger on the screen.)

Re:I have a solution to ads that still works.

It just seems stupid. But what the hell do I know. I'm not in it for the money. So I guess that means I'm evil, evil, evil!

Well, look at it this way. If you could spend $2000 of your own money every month without banner ads to have other people look at your stuff or $1500 with banner ads, which would you prefer? These people are often spending sizeable amounts of their own money to keep their site going for the sole purpose of entertaining the public.

They're not in it for the money, either, or else they wouldn't be spending their own just to keep their site up! Blocking their ads is the rough equivalent of saying, "I want you to have to pay more so I can see your site every day."

I consider that to be evil, evil, evil.

information wants to be expensive...nothing is so valuable as the right information at the right time.

Has it wrong

"Advertisers, whom the entire Internet is funded by"

Excuse me? The Internet existed before it was allowed to be used for commercial purposes, much less advertising. Advertising is a Jonny-come-lately, trying to make money off of something, which has a strong culture against it.

That is the whole point of the article, you can't fund the Internet off of advertising.

Re:I have a solution to ads that still works.

DEATH TO MODERN-DAY ADVERTISING!!! Today's ads don't just inform us of a product's existence; they also prey on our minds with flashing text, glitzy graphics, buzzwords by the dozen, and little white lies. Fortunately, we have the right to censor those ads; unfortunately, not all of us have the knowledge to do so. I'm striving to change that.

How, then, do you propose to support sites?

One option is to support a site through voluntary contributions (PayPal is one possible mechanism for doing so, but not the only one, and not without its own problems.) I know one author (whom I won't link to because I don't want to slashdot her) who has been informed by her free hosting service that they are not raising enough revenue through banner ads, so they want to go to pop-ups. She is currently taking a poll of her readers as to whether they would rather have pop-ups, or support her through voluntary contributions. Right now the majority seems to be willing to contribute, although it is not an overwhelming majority--there's quite a few people who say they wouldn't mind pop-ups. (Interestingly, most of those comment something along the lines of "I can kill the pop-up windows faster than they can load," which suggests to me that pop-up windows will not be a viable advertising mechanism, either.)

There's any number of good sites which I would be willing to donate a small amount to in order to keep them going. However, the maelstrom of misinformation that is Slashdot is not one of them. (Granted, I speak only for myself.)

author wrong about targeted ads

He makes it sounds like that targeted advertising doesn't exist. He is so wrong there. I used to work for one of the largest banner ad software companies. Our software supported all sorts of methods for targeting. This could be combined with the site's own tracking data to create ads that are appropriate for the surfer in question. Banner ad software can get surprisingly complex when targeting, inventory managment, and tracking come in to play. Lack of targeting has nothing to do with why banner ad companies have fallen apart.
Companies that buy the ads are realizing that it is difficult to create a presense through online ads alone but easier to do through tv, magazine, and even radio ads. These ads are larger, more interesting, and more difficult to avoid. Most banner ads are completly uninteresting. Meanwhile, BudBowl attracted a ton of attention. Poeple were actually betting on the result and made sure not to miss those commercials. Apple's 1984 commercial only had to be aired once to leave a permanent mark on the industry and set the ton for Apple for years to come. Until high speed access becomes a reality for a majority of internet users, banner ads will continue to stink. As the average bandwidth rises, more experimentation will be done with flash, java, streaming video, and other higher quality ads. The goal is to have the quality of a standard tv commercial but with interactivity. Just click on a gap dancer to by her jeans. This lack of quality keeps many non-Internet companies away from the net. They just don't see the need for internet advertising. For example, which is more likely to get you interested in car, a ugly animated gif of it zooming by, or a beautifull scene of it racing down a hill in the woods? Meanwhile, the net companies for whom it would make sense to advertise on the net are going out of business. Even Yahoo gets 30% of its ad revenue from pure dotcoms. Lose 50% of those companies and that is a significant effect on your bottom line.
Eventually, the Internet, radio, and tv will become more intertwined and more interactive. I see the net splitting like tv did, with pay services and ad supported services. Imagine HBO-Online vs. CBS-Online. Ads will continue to live on because people will always be willing to sit through them for free services. Always.

Re:I click the ads on purpose

> clicking the ad as a way of saying "Thank you" to someone who has provided me with entertainment/information [ ... ] I'll do the old right-click, open in a new window, then close it as soon as something comes up - I don't even bother to read it.

Unfortunately, while this is a good short-term solution and helps your favored site today, it doesn't solve the fundamental problem, which is that the ad hasn't resulted in a sale for the company whose banner you clicked.

Sooner or later, that company's gonna realize that despite all the hits its website has gotten, nobody's buying anything. Despite all the money it's given to its ad agency, it hasn't gotten a return on its investment.

It stops doing business via banner ads. The ad agency goes titsup.com and stops paying per clickthrough, because each clickthrough is worth less to it.

And your favorite site still goes down because it doesn't have enough revenue.

I've got nothing against clicking on the odd banner as an act of charity to a webmaster. I do it myself from time to time. But I have no illusions that it's gonna solve The Problem.

Re:I have a solution to ads that still works.

This results in a 404 error where the banner ad should've been. The link will still work, but you won't have to see (or download) the 468x60 banner ad (or the treeloot Javascript monkey).

DEATH TO MODERN-DAY ADVERTISING!!! Today's ads don't just inform us of a product's existence; they also prey on our minds with flashing text, glitzy graphics, buzzwords by the dozen, and little white lies. Fortunately, we have the right to censor those ads; unfortunately, not all of us have the knowledge to do so. I'm striving to change that.

Hear, hear. What better way to encourage individuals to set up and maintain sites like SomethingAwful?

"Hey, I like your site and visit it every day, but no way in HELL am I gonna contribute to YOUR banner revenue!"

There are a handful of really quality websites out there that are run by dedicated individuals who generally end up paying considerable sums out of their own pockets to provide the world with their site. Pete at Sluggy Freelance [sluggy.com] is one. Jon at Goats [goats.com] is another. They're great people, and they pour a great deal of personal time, thought and energy into something that generally ends up costing them money. The more people there are blocking the ads on their site, the more they need to pay out of their own pocket to keep their site going.

I honestly hope your little crusade to "educate" people into blocking ads falls on it's ass. I don't like that Treeloot monkey much, either, but I'm not enough of a jerk to deny the keepers of my favorite sites what little return for their investment they get.

Or had you never really considered that you were telling the guy who writes all that stuff you really like to go piss up a rope?

information wants to be expensive...nothing is so valuable as the right information at the right time.

Questioning the Metric

I do believe measuring click-through to determine ad effectiveness is about as silly as measuring the number of people who rush out to the store after seeing the doritos commercial. This isn't how people react to advertising.

There are admittedly times (usually 3:00am) when I am susceptible to clicking on banner ads. Of course, if you will notice, this is also the same time of day when TV is filled with infomercials asking you to CALL NOW. A banner ad is an informercial expecting an instantaneous response from the consumer. Very few products leave the infomercial land to become the cornerstones of an industry.

What an ad agency needs to do is to evaluate how to use internet advertising to increase product awareness, increase brand identity, and to demonstrate the product. The real change of how ads work on the internet will come when a third party non-computer related company begins to take market share away from the market leader through effective web ads. Personally, I think the current 7-Up ad campaign (the ineffectual adman) would make for a great web campaign using banner ads and short clips (clips that play when activated, avoiding the 'forced' aspect).

Until such an event occurs, all we are going to get are one website advertising for another website.

Re:The problem with advertising

The group I work with will always have a free site. Granted, it isn't the most impressive thing in the world, but there are people out there like us that are more interested in the slashdot like community type sites with the time and ambition to keep it going.

Unless hosting costs and connection costs go through the roof, there will always be some free sites. A labor of love by a few people pooling resources can definitely afford to keep a site alive. And if it is really good you will eventually get donations (in other words, if you grow too big for your britches, someone will probably buy you a new pair, or something like that).

The concept that everything has to be commercialized now is just sick, and wrong. There will always be some people that believe in the concept of a "free" web site, information or whatever. And I'm one of those people. Not everything is based on how much money you can generate. Hosting isn't that much (it costs a little, but split five ways, as in Faulty Dreams' [faultydreams.org] case it isn't bad), and I don't really see hosting costs increasing. They seem to still be going down.

I'll throw my karma on the fire

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:

On the internet it's possible to build quirky, interesting sites like /., 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.

"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.

Re:Shift in advertising

Reminds me of Cluetrain point #74: We are immune to advertising. Just forget it.

Perhaps that's part of the problem.

In Douglas Coupland's book Generation X, (this is the book that coined the term "Generation X", and before you knock it on the basis of what mass media has made of the term, read the book itself--but that's another rant for another time) one of the chapters is titled "I Am Not a Target Market."

It seems fairly accurate for GenX (as much as any stereotype of millions of people can be, which is not very much), but I can't help but wonder if that's really the best thing. "You're not a target market? Fine. Screw you. You'd like to see such-and-such a product? Too bad, you're not a target market."

I, while I consider myself fairly advertising-savvy, and certainly highly skeptical of any claims made in advertising, am not completely immune to advertising, nor would I want to be.

Re:Why Advertising Doesn't Work on the Web

BTW, isn't it interesting how Jakob Nielsen has enough money for his web site and articles - which have 10-20K of real content, and which load and render instantly, because they're only about 11-25K long?

Yet when I read a review of some game on some other site, I have to download 80K of HTML, wrappers for ad sites, another 40-50K of animated .GIFs, wait 5 seconds for it to render, and for all this work I get maybe three or four paragraphs of content, then I have to click on "next page" to do it all over again... sometimes five and six times for a single article that's (in total) about half the length of any of Jakob's articles.

Methinks there's a lesson to be had there.

Wanna cut bandwidth costs? Gimme 10K of content in 11K of HTML and one HTTP GET transaction.

It just might be cheaper than six HTTP GETs and 400K of HTML.

Ad stripping software will kill banner ads

Banner ads are DOA. Not just because they are not targeted, because people ignore them and soon will not even see them.

Jakob Nielsen has been saying that ads on the net don't work [useit.com] since 1997. And he's right.

Furthermore ad stripping software like Adsubtract [adsubtract.com] stop your browser from even asking for the ads.

It's only matter of time until people realize that those banner ads are sucking down the bandwith on their poor 56k modems. Once they find they can surf faster without the ads, it'll spead faster than All-Advantage...
-----

oouuaaahh

I take it that the author is either not very intelligent, or doesn't really know much about the Internet. Look at the following gems:

• Advertisers, whom the entire Internet is funded by, [...]
  Yeah, right, how was Internet funded before the web, then?
• The Internet has always been a medium that promotes anonymity and faceless, one-way interaction between consumer and business.
  No, anonymity on the net is a relatively recent idea. Traditionally, anonymity has been scorn upon on the Internet. And the key difference between Internet and other media-types has always been the possibility of two-way communication. On the other hand, television promotes one way interaction between consumer and business.

Also, the tone through the article was that the Internet needs better targeting of ads. It doesn't. Perhaps the web needs it, but not even that is true. The only thing on the Internet that needs ads are .coms. And personally, I don't care much about .com's.

Now what would happen to the web if the .coms died? Well, we would retain all the interesting sites, such as content offered by universities, personal pages, the gutenberg project, in short: anything of real value! What would happen is that most stuff that annoys us would be gone. Ads would be gone, lawyers would be gone, domain-name wars would be gone, badly designed sites with company graphics and too much javascript would be gone, and the bandwith would still be there.

But even if one see .coms as something good, and not something bad, there is the question of ads. People seem to have forgotten about micropayments as an alternative to adverticing. But seriously, what do you want? Pay 2 cents to access your favourite website, or have it filled up with banners and popups? I would like a portion of those micropayments, thank you!

The problem with advertising

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...

Re:oouuaaahh

I think the author *does* know a bit about the Internet. Do you even know who he is, or ever seen his site?

"Yeah, right, how was Internet funded before the web, then?"
Um, magically, by little elves. Duh, by federal grants to scientific research, educational institutions, etc., that have since dried up. Ever heard of DARPA?

"No, anonymity on the net is a relatively recent idea."
If anonymity is a "relatively recent idea" it is because it went without saying before. Only after the internet was commercialized, and privacy started being invaded, did people start buzzing about anonymity.

"On the other hand, television promotes one way interaction between consumer and business."
Yeah, from *them* to *you*; they're pushing. The internet is usually the reverse one way: from *you* to *them*; you're pulling. The internet *has* always been a medium that promotes anonymity and faceless interaction, because it was originally designed as a hypertext transfer protocol, not some neato human interaction mechanism. Short of signatures in packets, and cookies in a browser you're pretty much anonymous. Which is why he says the ad agencies are in such trouble...they can't survey their market.

"Also, the tone through the article was that the Internet needs better targeting of ads. It doesn't."
I for one wouldn't mind no ads at all! However, *if* we have to have ads (say, to support worthy sites like the author's), I'd rather have them be relavent. Not some stupid blaring BUY-THIS-WEB-CAM-NOW!, HIT-THE-GODDAMN-MONKEY! in-your-face ads.

"Now what would happen to the web if the .coms died?"
I am sure you would be glad to provide hosting services for every disowned site out there? There are plenty of worthy sites that survive on advertising. It sure would suck if Wired.com, or TheRegister.co.uk, or ArsTechnica.com, or TomsHardware.com, or AnandTech.com (etc., etc.) just disappeared.

1) Advertising sucks
2) Advertising pays money (when it works)
3) There are many worthwhile sites that need ad money

therefore, it is in their interest to have some sort of advertising business model that actually works (or some other business model that works, but one is yet to be found), and in our interest to endure some less-sucky advertising to be able to view said sites.

Re:I have a solution to ads that still works.

OK, something about your post just kind of got under my skin (not flammage, just a mild irritation).

Where, exactly, is the promise to anyone that creates a web site that they should be able to "make a return on their investment", especially a monetary return? I'm working with a group that has put up a site purely for the hope of getting our work out there. We don't want to have pop-ups, so we don't. We don't like banner ads, so we don't have them. Nowhere did we see, when we were setting up our web site, the guarantee that we would recieve any sort of compensation just for doing what we enjoy doing.

There seems to be this overwhelming mentality anymore that just by having a web presence you should be entitled to make money. It doesn't matter if your site sucks. It doesn't matter if you have absolutely no clue how to attract people. It doesn't matter if you have no revenue generation program of any sort. Just by being there, that should entitle you to make massive sums of money. I disagree with that mentality, and I know I'm not the only one.

The web started as a medium with relatively free information dispersal. And, in time, advertising agencies will come to terms with the fact that they have to be much more over-the-top, and in-your-face to make people see their ads on the web. If people aren't disgusted by it, then it may work. Here's an idea, do what they've done on TV and radio and make the ads entertaining. If there were any effort at all to make ads as entertaining as, say, the Bud character plays (with the frogs and lizards and feret) then maybe people wouldn't just ignore them. Just because you stick an ad on the page, that doesn't entitle you to any sort of monetary compensation. Do something to get people's attention in a way that doesn't just piss them off to no end.

Of course, having said all that I would say it is just a matter of time before the government cracks down on all this illegal software that blocks web ads. After all, we are destroying hard working ad companies if we ignore their ads. More and more it seems the most important thing in the world is to keep all the money we can moving towards the corporations and away from the people. Why corporations have so much more right to it than people in general I'm not quite sure. But I am sure that it's just a matter of time before it is law that advertising cannot be removed from web sites (just as TV is moving more and more towards a type of medium where ads cannot be ignored, or at least cannot be fast-forwarded through). It will take them some time, but it will happen.

I just don't quite get why it's so important that when you pay for your web connection, some people are even paying for bandwidth, you should still have to pay for content. With your cable bill you don't get charged extra for ads (unless you order a pay-per-view with lots of commercials, and they do exist, believe it or not). But with the Internet it seems that people feel they are entitled to monetary compensation just for throwing some words and pictures up on a page. It just seems wrong to me. You should have to work for money. The Internet is not the "get rich quick" scheme that many have made it out to be. You have to work just as hard to earn money this way as any other. It takes more than just saying, "I have a right to earn money dammit!" to actually earn money. I hope at some point people realize that. But more than likely the government will intervene on the behalf of the big corps and tell us that we are being criminals because we aren't just bowing down and handing over our paychecks to any moron that's in league with an ad agency.

It just seems stupid. But what the hell do I know. I'm not in it for the money. So I guess that means I'm evil, evil, evil!

Re:The problem with advertising

>It also doesn't help when people use things like Junkbuster to further eliminate any chance these companies have of making money.

Anywhere else except on the web, if a company wants to get money by annoying people, and those people blatantly ignore the company, it's the company's fault. I say let'em go bust. Unlike people, businesses do NOT have a right to continued existence. (no, I'm not saying there shouldn't be any businesses. But if they go bust, they go bust. It is not my fault that I'm not buying from them)

or do you also blame me for not reading the newspaper ads?

//rdj

How ads can work: sponsorship & affiliate programs

Many, many people here have stated many times over the various ways in which ads simply do not work.

One thing I almost never see used is sponsorship of a site. This is where a site could have a sponsor (or set of sponsors) that would be integrated into the page - something like "This page brought to you by CorpCo brand dish soap!".

This brings awareness of the brand to the consumer without the annoyance of ad banners. The site could have click-throughs that would take you to the sponsor site or show sponsor advertising (for instance, you might be sponsoered by Bud and the reader would be able to see the latest Bud TV ad through links on your site. If you think that will not help you, how does adcritic [adcritic.com] thrive?).

Even more importantly, a site seeking to gather sponsors could get many of the metrics they desired because the site itself could say "we're targeting 25 year old males that work at Burger King" and give some idea to the advertiser what kind of segment they would be looking at.

Not perfect, but better than it is now and within the range of feasability - there might never be a good way to determine who's actually using your site but you can say who you built it for, and revise that estimate as you go. Then it's just a matter of counting page views to get a rough idea of audience size.

The other means is using affiliate programs to help generate revenue, that seems like the easiest thing to do going forward - perhaps popular sites could even help companies the want to be affiliates with to start affiliate programs, in exchange for some extra compensation or limited percentage of the income.

It seems in the future that you won't just be able to put up a banner at the top of the screen and rake in income. On the other hand, the web will probably be a better place for it, even if sites have to work a little harder to get ad revenue.

Why Advertising Doesn't Work on the Web

The article argues that web ads are failing because

• networks can't provide user demographics
• advertisers don't know how to use the medium

but holds out hope these things may improve in time. However, Jakob Nielsen [useit.com] has been arguing for years that web advertising is inherently unworkable. See, for example

• Why Advertising Doesn't Work on the Web [useit.com]
• The Web in 2001: Paying Customers [useit.com]
• The case for micro-payments [useit.com]

Shift in advertising

People have complained about advertising since the dawn of electronic media. This is nothing new. That so many investors "bet the farm" on something so universally [ loathed | shunned | ignored ] in the "old media" world speaks volumes for their own greed and stupidity. The karmic wheels keep turnin', and these people are simply reaping what they have sown.

The nature of banner ads on the internet has always made them invisible to most readers. When the commercials come on, TV viewers hit the mute buttons, VCR viewers hit their fast forward buttons, and ReplayTV viewers hit Quick Skip. The world has learned (for the most part) to tune out the easily identifiable advertising. On the internet, it's even easier. At least with a TV, you pay attention to enough of the ads to know when you've returned to your show. Not so with a banner ad. It takes a miniscule amount of effort to read them, and their size/shape/color makes them instantly identifiable as something to be ignored. Even filter programs can identify them and eliminate them quite accurately (hurray for the Proxomitron [cjb.net]!)

So, given that, what are the advertisers going to do now? Some will fold up their tents. The smarter ones will adapt. One of the cleverest approaches I've seen was on a mapping site. Midway through the printed instructions was the location of a WalMart store that we would be passing. I suspect advertising will have to take a more active role in content in order to command money. Think old-tyme TV shows, brought to you by Alpo; or more likely, the Truman Show (with Yummy Mocha Cocoa.) Who knows, even corporate shills who work for big corporations like Target [target.com] might be asked to plop advertising links in the middle of their usenet posts or Slashdot discussions.

Advertisers will find a way, but it'll take more effort than they've given it so far.

John

regarding deadbeat clients

I'm not sure where the mention of delinquient clients comes into this. You always have people who don't pay their bills, and the figure is higher than most people realize. Probably one of the reasons that ./ sold out to Andover is because they didn't have a gameplan for dealing with the rigors of selling a service like banner space. That is fine, that probably isn't what they wanted to do, but there are pretty effective tried and true ways to get people to pay their bills. I have found that the casual mention of a collection agency does wonders. It works through my personal site [solariscentral.org] and my business site [spinweb.net].