The Devil & Online Advertising
April 15, 2007
A very long time ago, way back in the past… like 10 years ago, people started getting on this crazy thing called the World Wide Web. Somewhere in a dark room filled with crabby old men, it was decided that advertising online would never make sense… “nobody is really going to spend a lot of time in front of the computer. They have books & magazines to read, movies & television to watch, music to listen too…” (I guess they never thought we’d end up doing that ON the computer.)
It was this lack of faith in the internet that kept online advertising from being seen as a legitimate way for companies to reach their markets, so the key to the internet’s chastity belt was left right out in the open. With no set rules, people looking to make boon with online advertising established the game. Web pages could have several if not a dozen forms of advertising on a single page. (Can you imagine a 30 second TV commercial that pitched 213 different companies?)
How Do You Measure the Madness?
As it it is now there is no practical and meaningful standard of measuring a websites true value from an advertisers perspective. Let’s examine the following methods currently used to measure a websites attractiveness to advertisers…
The Most Common Terms of Traffic Measurements Are:
Unique Visitors - When an individual visits a site. Often tracked by unique IP address, unique visitors are only counted once no matter how many times they’ve visited in a given time frame.
Page views - How many times a unique visitor has loaded a single page on a site. One unique visitor could count for dozens, or even thousands of page views in a given time frame.
User Sessions - The session of activity that a user with a unique IP address spends on a Web site during a specified period of time. The number of user sessions on a site is used in measuring the amount of traffic a Web site gets. The site administrator determines what the time frame of a user session will be (e.g., 30 minutes). If the visitor comes back to the site within that time period, it is still considered one user session because any number of visits within that 30 minutes will only count as one session. If the visitor returns to the site after the allotted time period has expired, say an hour from the initial visit, then it is counted as a separate user session. - From webopedia.com
Hits - The number of “hits” a website gets is a useful number to know… like knowing how to make a fire for warmth, when you are freezing to death at the bottom of the ocean. Why does this number ever even get mentioned? It should have died the second it was created. “Hits” is the most misleading and meaningless web statistics term. “In web analytics, a hit is any request for a file from a web server.” So my one page website has 250 very small images on it and a style sheet for formatting my text. Every time my site is visited, the main page file is accessed, so is the style sheet and so are the 250 images… resulting in 252 hits per page view. So please for the sake of all that is sacred and good on this earth, please stop using the word hits when referring to anything to do with web statistics!
Poor Value Comparisons
Because our measurement terms are not always used correctly and each web statistics system measures website traffic differently it is nearly impossible to compare one site to another to find a value comparison.
Alexa has grown into one of the major site ranking and traffic measurement sites, despite the huge flaws in their system.
1.) Alexa measures traffic via people who have the Alexa toolbar installed in their browsers. So depending on your market you could be penalized for having a demographic of visitors who dislikes having extra clunky toolbars in their browsers.
2.) Categories on Alexa are organized by DMOZ, so unless you’ve managed to get into the frustrating DMOZ system… Your site won’t show in any of the category listings on Alexa. To learn more about “How to Get Into DMOZ” read this article by Jaimie Sirovich.
3.) Alexa shows their traffic measurement in confusing ways with percentages of Reach and their Page views. Not to mention their system for page views is ridiculous. “Page views measure the number of pages viewed by Alexa Toolbar users. Multiple page views of the same page made by the same user on the same day are counted only once. ” So if you have a site like POPURLS, you’re only getting one page view per visitor per day, despite the fact that your content is changing hourly.
Even other sites like Technorati & Delicious can show popular activity on the web, but aren’t exactly able to compare sites across the web.
Ad Network Representation
So taking into account that we can’t really accurately measure web traffic and compare it to another site, or accurately judge the loyalty of readership on a given site, or simply the value a website presents to an advertiser… that brings us to the people that are selling this big old mysterious thing called online advertising to anyone that will buy it.
A profit share that I’m pretty sure The Devil is jealous of
In just about every other industry where one party represents another party for a fee or percentage of interest or benefit of the transaction, the percentage is usually 5 - 15%.
Here is a quick scale of industry profit shares:
Rural Village Matchmaker: 3% of Dowry or 11 chickens.
Residential Real Estate Agent: 3 to 6%
Talent Agent: 5 to 10%
Venture Capital Broker: 5 to 10%
Boxing Manager: 10%
Trial Lawyer: 33%
The Devil: Your Soul
Ad Networks: Your Soul & 30 to 60%
A 50% fee just to match me up with a shady company selling a text link on my site for “Free Animated Smiley Faces”?
Right now ad networks are a necessary evil. There is no way for a small-medium sized site publisher to get a call into the major media buyers to sell space on his / her site. The networks have the sales dogs and Rolodex to land sales, but they seem more concerned with making lots of change right now instead of dollars in a more quality, standardized future web.
View a breakdown of the Major Ad Networks.
Is There Any Hope for a Solution?
Online advertising has rocketed into a major industry, so in order to get things to change you need a strong disruptive force and some great leadership. I’ll be attending the Future of Online Advertising Conference in June in hopes of finding some of those leaders. (If you’ll be there too, let me know.)
Cut the Click-Thru Crap
Adsense was an amazing tool in that it gave every-joe the ability to monetize their site, but when the model pays out more money per clicks… you’re just setting things up for click fraud. Google has already settled millions of dollars worth of click fraud law suits, but Pay-Per-Click ads still encourage site owners to trick their visitors into clicking ads. A site owner may not start the morning off with the intent to defraud advertisers, or trick his daily site reads, but at the end of the day if he makes pennies compared to dollars when people click his ads… he’s going to find a way to put his text ads in places that make them appear like content or so that they don’t look like ads and get accidental clicks. This doesn’t help anyone in the long run.
Cost Per Influence
Jim Coudal at The DECK uses the term Cost Per Influence in their advertising model and I think it is a step in the right direction. I think we have to consider the value of the traffic on a site and the influence it has on it’s traffic.
A spammy, made for adsense type site about buying fishing equipment with good page rank and a great domain name might get thousands of visitors a day, but I doubt any of those visitors ever come back once they realize there was nothing of value at the site other than advertising links. On the other hand there may be an original blog written by an experienced fisherman who reviews products and where to buy them. His site may only get 1/2 the traffic the spam site gets, but you could say that his traffic is x10 more valuable. Right now ad networks are not considering the value of this traffic.
Accurate Rankings & Value Comparisons.
We absolutely need to define how it is we measure web traffic and then we need to create a score for each site that takes into account:
Average Time on Each Page: The longer an ad is exposed to a visitor the greater the value to the advertiser.
Return Visitor Percentage: The loyalty of a site’s readership will have an affect on the sway it will give to an advertiser on that site, and increase the positive attitude towards that advertiser.
Ad Impressions Served: The total number of ads served on a site and presented to visitors.
Ad Exposures Per Page: The more ads per page the less influence each advertiser has on a visitor.
Let’s compare to hypothetical sites…
| Site A Time on Each Page: 5 Seconds Return Visitor Percentage: 40% Ad Impressions Served: 10,000 per day. Ad Exposures Per Page: 2 per page. |
Site B Time on Each Page: 2 Seconds Return Visitor Percentage: 20% Ad Impressions Served: 100,000 per day. Ad Exposures Per Page: 4 per page. |
We can see that while Site B is serving 10x the ad impressions of Site A, visitors are spending less time on each page, aren’t as loyal and are subjected to twice the ads. Site A should be able to charge much more per ad impression than Site B. Right now ad networks aren’t taking the time to understand the value of each site’s traffic and thus we end up with spam crap sites making as much or more in advertising revenue than original, quality content sites.
Raise the Price. Raise the Quality.
Do you know why you only see those terrible, low-budget ads on your local television stations? Because it costs too much for those guys to hock their “Super-Mega-One-Day-Only-Sales-Extravaganza!” on national television. When the price point to advertise online is in the pennies per CPM, then you’re going to end up with low-quality advertisers. If all major networks were required to set a minimum standard of around $4 CPM, it would make sites like Myspace next to impossible to advertise on. Your $400 for 100,000 impressions would go in a matter of minutes… unless, myspace showed less ads per page and increased usability so people could, comment, rate, search etc. using technology like ajax. Myspace could make more money creating a better user experience and loading less of their bug ridden pages, giving their servers a break.
We have all these amazing new advancements in web scripting that allow us to give the user a great experience, but when we implement them we kill our page views. And so long as advertising income is generated by page views, we’ll continue to have sites that break up stories into 15 pages, just to make a few more pennies as you frustratingly click ahead to finish the article.
Change the Industry.
In order for us to stage a revolution we all need to understand just how bad it is. We, as site owners, publishers and writers need to begin to demand a higher level of quality. Online Advertising just said something bad about your mother… so get upset, use your site or your blog to share the information and demand a change.
If you liked this article, bookmark it on del.icio.us or vote for it on Digg!
*I would like to personally thank Myspace.com for all of the crappy banner ads used in the header image of this article. Without their dedication to shoving as many ads down our sockets, regardless of their quality, I would have had to spend a lot longer looking around the web for bad banner examples.*
74 Comments
The Devil & Online Advertising at Blogtrepreneur | Entrepreneur Blog said on April 15, 2007...
[…] it’s Eric from Young Go Getter. I spoke with Adnan last night about an article one of my partners Darius put together critiquing online advertising. He wanted to post about it on […]
Lorren said on April 15, 2007...
Hey Darius,
Great article. Just one question for you though.
Would you mind going a little more in depth on the following statement?:
“We have all these amazing new advancements in web scripting that allow us to give the user a great experience, but when we implement them we kill our page views.”
Darius said on April 15, 2007...
Sure Lorren.
Ajax is an example of web scripting technology that allows a website to perform and action without needing to reload the page. For example, when you vote for a color on colourlovers.com we can submit your vote without needing to reload the entire page. This allows a site visitor to surf quicker and perform more actions per page without needing to sit through more page loads.
Stuart Loxton said on April 15, 2007...
Amazing and so true, to be honest I dont see an easy way for companys to get out of this system. Everyone (both the advertisers and those advertising) want a fast and automated system wich is quick and easy, and thats what the system does, however its priced and judged very badly. Small things like this slow down the evolution of the internet, and most technology.
Moses Francis said on April 15, 2007...
Great article, and if i say so myself..good accompnaying graphic too!.
I agree with you on “Poor Value Comparisons”, and nother one seems to be the great valur of Google’s Pagerank, overrated i think.
The Devil & Online Advertising -- Young Go Getter « The other side of the firewall said on April 15, 2007...
[…] 15, 2007 at 3:20 pm · Filed under Business, Google The Devil & Online Advertising — Young Go Getter: a very interesting article about the flaws of on-line […]
Goshua said on April 15, 2007...
Amazing,
You had me at “Cost per Influence”.
Congratulations!
Bill Babcock said on April 15, 2007...
Interesting insights, and certainly true, but I think the market sooner or later will take care of itself. It’s worth considering how young the web really is. Depending on how you look at it we’re about 3000 days into this experiment and perhaps 2000 into making it work as an advertising venue. It’s really amazing that anything works.
Also consider that anything good that anyone can dream up some shortsighted fool can break. Ultimately the model will be about value received, not clicks or scams or impressions. One surprising thing about blogs, forums, and other web media is the high degree of value delivered to the reader compared to other media (value in this case meaning benefit minus cost). In return for the investment of a little time we can benefit from a great deal of intelligence, insight, and experience. Once you get past the dreck that is.
I think that as advertising models shift toward web 2.0 sensibilities the value will grow.
Or not.
BSN said on April 15, 2007...
I’m embarrassed to say as a marketeer that I failed to arrive at the “real-life” equivalent of an appropriate commission for an ad/text-link broker. I think I may have to re-think my relationships. thanks for giving me food for thought!
Mark Buckshon said on April 15, 2007...
You make some excellent points here — notably your observation that the price of entry for online advertising may be too low.The ease of entry (and lack of control over entrants) invites crap and scammers.
Your writing may give some explanation (outside of the fact that entrenched interests will obviouslyprotect themselves) why the arguments about the collapse of traditional advertising media may be premature. “Old” media — cetainly on the national scale — has built in controls and systems to ensure fairness and value; and the little local players (as well as the bigger ones nationally) who may not have the benefit or cannot afford things like audits and formal readership/viewership surveys, have solid, meaningful and relevant relationships often built through experienced and effective sales teams.
I’ll be at the Future of Online Advertising Conference too — hope to see you there.
Ethan Bodnar said on April 15, 2007...
Hey Darius,
Just wanted to let you know I will be at the Future of Online Advertising Conference. You should know that I am 17 years old, my name is Ethan Bodnar.
I would love to meet you at the conference.
Best,
Ethan
Kevin said on April 15, 2007...
Great stuff again, YGG. Keep it coming.
Darius said on April 15, 2007...
Bill, thanks for the great response.
I hope that the market will correct itself organically, but I’m not sure how fast that will happen. A company like Google has all the ability to make a significant change in the online advertising industry, but they make millions on a daily basis with Adsense… I’m not sure there is a lot of motivation for them to make a big change, especially since they make most of their money off the click percentages.
Hawaii SEO said on April 15, 2007...
You can do some interesting things that you didn’t mention.
You can track the people who only saw the banner but never clicked on it to your conformation page. You can also measure this in a A/B split test where half of the people never see your banners over a period of time and the other group sees them everywhere to measure the impact of banner “Views” on purchases.
You can also serve banners to people who visited your site but did not buy. (After visiting your site, they suddenly see your ads all over the place.) Again… you can test and measure the effect.
There are all sorts of payment options like cost per acquisition (CPA) where the advertiser doesn’t pay for the banner impressions but for sales performance only.
There are all sorts of targeting options as well.
Banner advertising works. The big advertisers aren’t stupid. It can makes smart & well funded people a boat load of money.
As far as Ad Exposure Per Page goes… I noticed you have two Google ad blocks on your page. In general… There can be a huge bid gap between the top four ads and #5. (Most people only have one ad block with 4 spots) Because of this, if someone clicked on the second set of Google ads, lower on your page, you might only make 1/3 or less of what you would make if they clicked on the top set. You might make more money if you changed the second set of ads to some sort of relevant affiliate links or other sort of ads.
Tim from bla.st said on April 15, 2007...
Hi there, thanks for the great article. The points you have raised are why I created the bla.st advertising directory (thanks for putting a card on by the way!)
The goal is to make advertising useful (a bit like the yellow pages) and free for both short and long term ads.
I think there’s huge opportunity online to make advertising really useful to people, but it means changing the way advertising works. Currently it is the enemy- something people try to block or learn to ignore, perhaps because current advertising is forced upon people. How can we make advertising useful and desirable instead?
Mike said on April 15, 2007...
Interesting article, but is it really up to websites to change the game? Personally, I don’t think so. I’ve been doing online media buying for a long time, and it never ceases to amaze me how some large-well known ad agencies seem to have buyers that have no concept of smart buying habits. For instance, why have I seen ads for Monster.com on a site with a primary demographic of 6-14?
I think as the Internet becomes a more and more accepted medium for advertising with big brands and agencies, things will naturally evolve. The fact is, good, solid creative performs much, much better than ugly and intrusive advertising. Ads on sites where people want to be advertised to, to hear about your product, perform better than random sites that are used just to boost impressions.
And when it comes to metrics, as a buyer I’m more concerned about site relevancy than reported traffic details. Of course, you want a site that gets visitors, but relevancy is king.
Yes, the numbers that you hear associated with online advertising are often flawed, or don’t even come close to painting the bigger picture. With a little careful monitoring though, you can really come up with meaningful numbers based on what sites normally provide. Despite click fraud, CPC is still a perfectly valid and important number to analyze when put against conversion rate to get a bigger picture, among the other methods.
Many agencies buy for the web like they buy for TV/Radio, which is a mistake. Generally speaking, impressions are king for the latter mediums, but with the web you have so much flexibility it’s just a waste to buy for impressions only.
/rant
Darius said on April 15, 2007...
Aloha!
I don’t think the big advertisers are stupid for using the current system, I just think they are using what methods they have right now to reach the online market.
And I don’t think CPA and the other cost per action methods are the right answer. I may see an ad on your site for a product that I currently don’t need, and so I don’t perform an action… but a few weeks later I may be presented with a problem and remember that advertiser and go google them to find it.
It was your site that introduced me to the product, but you won’t benefit from that connection.
Darius said on April 15, 2007...
Mike, You raise a good point and something I missed in my article.
Relevancy is hugely important in defining value for an advertiser. You’re dead on that it doesn’t make sense for Monster.com to advertise to a 6-14 demographic (unless child labor companies are now using Monster). Blanket buying on major ad networks makes sense for a product that has a wide demographic, like a PG-13 blockbuster movie, but not so much for niche market products… but Monster probably just bought space using a network that sells ads on thousands of publisher’s sites… that network then drops it on any site in their network willing to display it. Our match-makers need to create more quality matches.
It is a tricky thing to try and quickly create a quality score for sites, taking into account, relevancy, quality, reader influence, etc. But my opinion is that we need to move in that direction to improve the industry.
courtney said on April 15, 2007...
wait a minute… I thought I was going to get another upfront season - just with more hungry sales reps, cooler chotchkes and different formats… you’re telling me we should change the metrics too?! What, and let all of those reach/frequency benchmarks die out with the 2-bottle lunch?!?!?
someone should tell them that all this “engagement” talk being bandied about can actually be measured - without the help of a single GRP.
thank goodness someone said it.
- C
Ethan Bodnar said on April 15, 2007...
continuing with what mike is saying…
perhaps ads can be custom generated for individual vistors
for community and scoail networking sites you have to login and they could target ads based on your personal interests and your activity on the site. this makes ads super relevant.
this could work for facebook, myspace, and coutnless other sites.
also i really like the ads from the deck because they just look good. my concern is how to get rid of flash banner ads after they have been so widely accepted. is it possible to make them look better?
looking forward to FOOA
Wes Bos said on April 15, 2007...
Excellent post, Ill admit that its rare that I click ads to find new products because as I grew up a majority of the ads were trying to trick me. “Free Animated Cursors”= spyware and so on.
Son Nguyen said on April 15, 2007...
I think there will always be a combination of things. Advertising will always be annoyed to many people (distraction) and can be helpful to many other who are looking for something (facilitation). Like somebody said before, it’s a revolution, with continuous new innovations. Right things come at the right times will determine the future of advertising.
Hashim said on April 15, 2007...
“I think we have to consider the value of the traffic on a site and the influence it has on it’s traffic.”
This is already happening for the larger sites. They sell themselves based on influence, not just traffic, and they price themselves accordingly.
Chad’s dailies » Blog Archive » links for 2007-04-15 said on April 15, 2007...
[…] The Devil & Online Advertising — Young Go Getter (tags: online marketing advertising articles) […]
Dame said on April 15, 2007...
Great article.
One of the best I’ve read on online ads.
Aaron said on April 15, 2007...
Does anyone have any suggested solutions. I am just wondering what everyone is thinking about the direction that online advertising should go.
Hawaii SEO said on April 15, 2007...
Quote:
“I may see an ad on your site for a product that I currently don’t need, and so I don’t perform an action… but a few weeks later I may be presented with a problem and remember that advertiser and go google them to find it.”
You can measure this as well. It’s called the “Media Stacking Effect”. You can measure how many and what kind of interactions people have with your banner ads and search over a period of time.
Some people give the conversion to the first cookie set in the stack and others give credit to the last. Others do a combination of the two where something that was clicked always gets credit for the conversion even if a banner impression that was only viewed was the last recorded interaction.
This is how people determine the efectiveness of super generic ads and branding campaigns. For example: If you bid on the word “Shoes” you might not get many conversions attributed to that keyword because brand name queries further down the stack receive the credit. However… The generic query resulted in a favorable encounter and increased the likelihood of purchase.
The stacking effect is measurable and smart advertisers who are well funded analyze these types of things because they know the first encounter can be just as influential than the last.
If you as the publisher don’t benefit from the effect, that’s your problem. Try posting more relevant ads or blog on topics that are interesting to buyers versus researchers. Don’t blame “The system” because you blog on topics that don’t inspire purchases.
It’s not “Madness” and people measure it quite effectively to earn huge orofits online.
Brian Breslin said on April 15, 2007...
What about hybrid models or a stop gap measure of charging based on the time of view? Fantastic article either way. definitely got me engaged and bookmarking the site.
interactive daily - interactive advertising and online marketing news » 3 Confessions of an Online Marketer said on April 15, 2007...
[…] over at YoungGoGetter.com has written up a piece about the online advertising market with some good information about common […]
Collis said on April 15, 2007...
An excellent post Darius, and some real truths about online advertising. It certainly is an evolving world and it certainly feels like there is room for a better solution. I imagine that competition between ad companies will help drive their commissions down over time to something more manageable. 50% is kind of absurd
Eric said on April 15, 2007...
Kind of absurd? It’s out of the question.
I find it interesting that some people take the “this will work itself out over time” approach. The truth is that if EVERYONE took that approach, nothing would change. It’s the select few who refuse to let it “work itself out” that end up changing it.
That’s just a silly ideal - change is created by those who don’t sit on the sidelines.
A bit of Linkage at Web Business with North x East said on April 15, 2007...
[…] at YoungGoGetter, Darius writes a really interesting piece on Online Advertising which is well worth […]
Filip said on April 15, 2007...
I agree on the critique, but I have deep concerns about the solution. You write about how it’s difficult to unite on something as simple as unique visitors/pageviews counting. Now imagine how difficult it would be to have your way with all the other aspects. You aren’t suggesting some sort of 10MB toolbar sitting on everyone’s browser, are you?
I think the way to go is to educate the marketing managers. I don’t know about the US, but here in the Czech republic those people are lost. They are willing to invest in internet marketing just because they hear it’s growing. They don’t understand the numbers nor the principles behind them. They don’t even know they’re paying 50+ percent shares to the agencies.
If they did know about all these things, I think they’d be much more picky then they’re now. Even in AdWords/AdSense Content network you can select the exact site you want to advertise on.
To conclude: Thanks for posting this! Please do write more articles and/or blog posts about how internet advertising works you all. Target them at the marketing managers, not the SEM and SEO experts. I believe that’s the way to go.
Axe Software Blog » Blog Archive » How to make online advertising work for your site said on April 15, 2007...
[…] Here’s a good blog post about online advertising: The Devil & Online Advertising […]
Lisa Price said on April 15, 2007...
Great article - bring on the disruption
Gary Reid » Blog Archive » Gaming the Online Advertising Industry said on April 15, 2007...
[…] again Seth signposts us to a great post, this time from Darius of YGG titled The Devil and Online Advertising. Darius makes some very good […]
Links - 16/04/07 « Krugergold Finance said on April 15, 2007...
[…] The state of Online Advertising(younggogetter) A very long time ago, way back in the past… like 10 years ago, people started getting on this crazy thing called the World Wide Web. Somewhere in a dark room filled with crabby old men, it was decided that advertising online would never make sense… “nobody is really going to spend a lot of time in front of the computer. […]
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Marketer said on April 15, 2007...
You mean there are still people out there who don’t track ROI from specific campains/ads/sites?
Best measure of the quality of traffic from a site… how many convert vs. your cost.
links for 2007-04-16 | nicharalambous.com said on April 15, 2007...
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Jeffrey Eisenberg said on April 15, 2007...
Traffic has always been a lousy measure of success. Conversion is part of the equation but not the entire picture. I wrote about this issue in Seven Strategy Challenges For Effective Online Marketers.
Stephan Barrett said on April 15, 2007...
Hi Darius, I am not sold on some of your blanket comments about the effectiveness of tracking and measuring. Yes there is no 100% way, but how do you propose to measure influence 100% of the time?
Whose job is it to persuade an action anyway? The advertiser or the medium?
Internet advertising is becoming so much more like broadcast television advertising in the fact that advertisers pay for exposure for their product or service to communities tied to demographics that fit their product or service.
With communities like Myspace this phenomena will not go away anytime soon.
When you have creative entrepreneurs developing new ways to get ads into everything, even phone busy signals, I see a time where people will pay for silence, while that is not even perfect.
Dell Hell strikes back « Bad idea, indeed said on April 15, 2007...
[…] a lot to say about those issues… Have a look a “the devil & online advertising” that proposes a great summary about our (online media owners) lack of […]
Aaron said on April 15, 2007...
I think Stephan has some good points. It is up to the company to come up a compelling campaign. Also, a good part of online marketing today is like broadcast marketing. It’s about building brand recognition.
Which makes me think that possibly one reason why one could justify higher costs is because it does get immediate reactions from more customers. TV and Radio are slow and residual conversions but online can be instantaneous. Just a thought.
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Introduction to Online Advertsing for Small Businesses | Blackrock's Business Ideas said on April 15, 2007...
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Shaunls said on April 15, 2007...
thankyou for pointing that out about Alexa - way too many c-levels make judements and forecasts based on Alexa. IMHO its so far away from being an accurate gauge of the web stats. In fact I dont know a single person who has the Alexa toolbar (ok, my friends are all geeks - but we count you know!)
Cheers
Shaun
unbrilliant.com » Blog Archive » I agree with Seth…. said on April 15, 2007...
[…] This is worth a read (click here) […]
Thomas said on April 15, 2007...
…So if you have a site like POPURLS, you’re only getting one page view per visitor per day, despite the fact that your content is changing hourly.
not quite right, the average user visits popurls four times a day.
best,
thomas
Darius said on April 15, 2007...
Hello Thomas.
I’m a regular POPURLS visitor and you’re right, I visit about 4-7 times a day.
What I was saying, was that the way Alexa rates pageviews. (Only one pageview per page / per visitor / per day.) That a site like yours get penalized for being innovative and presenting changing content on a single page.
Thomas said on April 15, 2007...
Darius, yes correct - the alexa ranking curve even looks like a roller coaster although traffic steadily increases…
Is online advertising broken? | Internet Marketing Blog said on April 15, 2007...
[…] This post is worth a read: The Devil & Online Advertising — Young Go Getter. […]
Ian said on April 15, 2007...
Pleased to see we are not the only ones still struggling with clients / industry comments around hits - it still makes me laugh when people refer to this.
Not totally convinced about your comment re “the longer an ad is exposed the greater the value” but as part of a broad calculation maybe. Any thoughts on Pay Per Action in this mix?
Darius said on April 15, 2007...
I appreciate all the great comments so far and I’m doing my best to keep up with the points people are making.
It seems the greatest amount of push-back I’m hearing seems to be coming from people on the makreting / advertising side of the game and I suppose I understand your concerns. If it is your job to create interesting material for your client and you have to prove the market in fact works in order for them to pay you for your job… then yes, I could see why you would take the time to personally build systems to track ROI and figure out the conversion rates on ads.
To be honest and clear, I’m coming at this from the online entrepreneur side of the game where I have a community site with a targeted demographic, pretty great traffic that has received top honors… and I feel like I’m getting hosed because I’m not willing to create clever adsense blocks that look like content.
We as site owners are mostly left to have ad networks do the sales work for us and so long as they aren’t working on upping the quality, we suffer for it. (Major sites can afford to hire sales teams to sell their own ad space, but that is probably a small percentage of sites.)
I started this article as a tool to develop a conversation and I’m glad that it has received as many comments as it has. I think we are all agreeing that online advertising has room to improve, but how do we take the next step and actually do something about it?
As for Pay Per Action & Pay Per Click… I’m still not convinced you can measure that. For example, I’m a regular reader of a financial website and their is a quality advertisement for an investment company doing some good work investing in sustainable businesses. I may not click thru or have any interest in the company, but at lunch a friend mentions having some money he wants to invest in sustainable businesses and I mention I saw a company listed on the financial site I read. There is no way to track that conversion. What the investment company was paying for was exposure to a demographic.
The other thing that I think is a problem and I didn’t mention in the article is ad networks that don’t count international traffic. We have a wired-global world. When I want advice on something I don’t go next door and ask my neighbor. (I don’t know their names.) I go online and ask my peers and people I talk with on a regular basis. I go on the business forum I read and ask them what they think about a company…
ai-depot said on April 15, 2007...
An cross between eBay and an advertising network solves all these problems. I just signed up to Project Wonderful at
http://www.projectwonderful.com/ but for publishers, it’s by invitation only at the moment.
And at 25% commission (they assume all payment fees too), I think it sounds promising.
Fingers crossed this is the answer!
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Stephan Barrett said on April 15, 2007...
Darius, thanks for clarifying the specifics of the article. Maybe the title should have been The Devil and Online Advertising for young Community based online startups. (doesn’t quite have the same ring to it though)
I’ll go out on a limb and say that community based ad revenue for the online ad moguls is pretty small. This may only affect your niche while the current online ad models work pretty well for a wide variety of companies because its based on user needs/wants.
Online advertising has always catered to direct response instead of branding (which is what I think of when I hear the word influence). Correct, there is no good way to measure the affect of an ad in the situation you gave, just like tv, radio and such. Branding and awareness campaigns need time to work and to be measured.
I think communities that are interested in big business have to take one of two revenue models.
Consider Threadless, who creates value for their community, but gives the community what they want/need and found a way to profit on that exchange. The Threadless community has a want/need to express themselves AND to be stylish. Win + win = BIG win for Threadless. Where are the ads on Threadless? Why? Their revenue model is based on satisfying community wants/needs in a profitable way.
Other communities have taken the advertising model. So page views which means ad rotation which means eyeballs are what they are in the business for. So they don’t spend lots of time developing ajax fresh versions, which would hurt their business model.
I understand the quandary. Deliver value and usability or deliver eyeballs. The current model doesn’t work with trying to do both at the same time. You have to pick one. It’s business.
I think for CL, focus on what the community wants/needs. I use CL for color models to design from and I’d pay for a quarterly printed “what’s fresh” book. I’ve read where others would use it more if they had pantone matching specs.
I venture to say the answer for sites like CL is NOT online advertising at all. It doesn’t work for the community because: 1) Their users are generally paid to be on the internet all day long and ads are ignored by these users and 2) Their community would only look at an ad to critique it as creators of advertising themselves.
Darius, where is your survey? What is the biggest need/want of your community? How can you capitalize on this in a profitable way?
Your pot of gold awaits those answers.
SB
Mike said on April 15, 2007...
And its here not just for the Web, run and hide:
http://www.inpageads.com/index.cfm/p/news.detail/article/22.htm
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