Online Advertising is Dead...

Online Advertising is Dead...
... if it was ever really alive.

You know the main problem of advertising online? People
hate ads.

Way back in Internet history there were banners...
especially run-of site banners, which advertisers bought
per thousand impressions. I think advertisers were paying
up to $30 CPM for run-of-site banners. I remember selling
some to Entrepreneur Magazine... although I don't remember
how much I charged them.

After a while, banners were "tuned out" by site visitors,
clickthrough rates nose-dived and the cost per thousand
impressions fell through the floor.

What did advertisers do?

They started to pay Goto.com (now part of Yahoo) per
click... and the Pay Per Click industry was born. Google
took this form of advertising to new heights with their
Adwords/Adsense system... and very clever it is too.

But the fact remains that people don't like advertising.
Take a simple example... what do you do when you're
watching a movie and the ads are shown? You head to the
kitchen for a snack or drink, right?

Advertisers got wise to that trick, so they decided to
"sponsor" a movie and have a little mini-ad before and
after the movie segments. I guess you're more likely to see
it because you haven't yet left for the kitchen, or have
just got back from it to see the next movie segment. Also,
the message isn't, "buy our stuff", it's more, "we're good
guys sponsoring the movie you're enjoying". So it's more of
a soft-sell.

Take that message online and it doesn't really work. How
can you make an interstitial page into a "soft sell"? Apart
from closely targetting it to the page the visitor last
saw, and the page they'll see next, there isn't much you
can do. It's still an ad.

So are Adwords/Adsense ads being "tuned out" like banners
were?

Are website visitors rebelling against advertising in
general?

According to the Telegraph, the huge "Web 2.0″
properties are struggling to turn huge numbers of site
users into cash. Apparently, "Mark Zuckerberg apologised to
Facebook users for the "bad job" his company made of
implementing Beacon, a controversial new advertising system
that exploits the power of 'word of mouth' marketing."

Oh dear.

The problem, for Facebook, is that they have huge numbers
of competitors... and those competitors will be quite happy
to undercut whatever revenues Facebook generates... and Web
2.0 users will be quite happy to go to whatever Web 2.0
website that offers the least advertising.

So we're left with a dilemma which has existed since the
Internet was born... if people are free to decided which
websites they want to visit, and there's intense
competition for website visitors, can website owners afford
to put advertising on their websites? On the other hand,
can they afford NOT to?

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Andrew Jamaz recommends the Internet marketing blog at:
http://www.NeilShearing.com/