Will Ad Networks Compete for Your Ads? 48
bokelley writes "TechCrunch has an article today about a new product called RMX Direct that holds a real-time auction for every ad on a site. Networks and advertisers bid based on the quality of the user (geography, site, time of day, etc). This could be game-changing for sites and blogs; if networks have to compete, will we see AdSense disclose more about its payouts to publishers? Will other networks like Advertising.com and ValueClick participate, or will they continue to force publishers to make hard choices? In a lot of ways, this has similarities to the challenges that Linux faces in a Windows world. The open source community has been fighting for more than a decade to make the progress it has, and we're not there yet — will online media be different?"
Compete (Score:3, Interesting)
Big or small sites? (Score:3, Interesting)
This isn't a serious competitor to AdSense for niche publishers. Here's why: all the networks it aggregates are focused on large publishers. Most require a boatload of page views to participate, and serve low-paying run-of-network ads to their smaller publishers. The great thing about AdSense is it allows you to serve relevant, effective text ads on sites like mine that get only 10,000 visitors a month. AdSense was designed to work well for small publishers AND huge ones. That's why it's been effective.
RMX Direct is trying to create a service that can bridge that gap. My bet is that it will monetize better than dealing directly with a single big-ass ad network, but less well than AdSense.
Re:Web Revenue Stream = Overblown (Score:3, Interesting)
MySpace had to get bailed out by Google; they *weren't* making money on their non-stop heavy handed ad-extravaganza. Have you ever visted MySpace? It has more ads going than than an "Advertising suppliment" and there are interstitials and popups and every other trick in the book. It's the highest trafficed site on the web: and they're still in business trouble!
If the #1 top traffic site in the world + shamless quantities of advertising = money losing failure, where do you get the idea that AdSense and other programs are making webmasters rich?
Google jumped in to float MySpace because it represents a marketplace they can use to experiment with gaudy ads and even video. They couldn't let it go strategically either. However, don't think that these sites are making money on all those ads, particularly after the bandwidth spent hosting all that fat content. Have you noticed how the Wall Street Journal and other real sites are linked to subscriptions? That's because advertising doesn't pay the rent!
All the ventures that expected to sell things via advertising went under in the dotcom years - I was here watching. Nothing has changed just because people have forgot about the lessons they were suposed to have learned.
I have dealt with AdSense, AdBrite, and Yahoo! and not only do they pay pretty much nothing for views or clicks, but the traffic they report (even just for impressions, which they don't have to pay for) was around 1/8 the figure of my own stats, pretty much across the board.
I had stats running in three ways: my own web logs, external counting via cookie based Urchin stats (Google Analytics), and the impression numbers related by affiliates. All of these together were consistant. Yet after 100,000 page views, and multiplied by the number of times Yahoo! was putting an ad on my page (3 or 4, depending on their whim), they would consistantly report not ~350,000 views, but rather ~ 45,000.
If they filter out 85% of my traffic, how many clicks did they absorb? In talking to other web hosts with significant traffic, I saw a pretty clear pattern of fraud out of all the pay-per-click advertisers.
I wrote up details in Secrets of Pay Per Click Advertising [roughlydrafted.com].
The real money in online advertising is not related to banner ads or the contextual ads, but rather Paid Placement Search: paying the search engines to show an ad for a product right when users are searching for it. There is big money in this because it actually results in a lot of sales; banner ads are purposefully overlooked by readers who have grown numb to them.
In any event, no amount of clever business models is going to sell blog advertising that earns any significant money. Unfortunately, the real money in web advertising for individuals (apart from paid placement search) is in creating thousands of fake domains that try to catch searchers typing things in directly, then show them Google/Yahoo ads for what they were looking for; this works, and makes the slumlord domain parkers money.
That's why there are so many worthless "fake search" sites, and why even Google searches now return plenty of these fake search or fake content sites, because Google, et all, are creating a model where catching buyers is more valuable than presenting real information.
Since providing access to information (and sneaking ads into the mix) is Google's core compentency and their singular business model, how long can Google crap where it eats? Can they expect users to keep using them for search results if the results they offer are worthless pages full of their own ads?
Google originally unlocked the web and made it accessable. Now they are