Media, Silicon Valley

Bad News for the Valley and Media (Ok, Worse News)

Henry Blodget has a frightening-- but I think right on-- post about display advertising online. His take: Wake up! It's going down. Why? The economy, yes. But more important, I don't think display advertising has yet managed to make itself an indispensable part of the ad mix the way paid search has.

There's a debate subtly raging about whether we've really nailed display advertising on the Web to date. Some people, Henry included, say "Duh, it works." But "it works" isn't the same thing as having nailed a new and unique method of advertising consummate with the uniqueness of content and audience on the Web. Online should be something different, the same way print publications should be doing more than just putting the same words on a digital page. Floating ads? Pop-up? Pop-unders? Roll overs? Isn't it all just a quick gimmick until we find ways to block it? I can't remember a time I clicked on a banner ad and those automatically loading video and audio ads just enrage me to the point I don't have a positive brand-association.

Anecdotally, I keep hearing about no-brainer opportunities for brand advertising online to unique, highly desirable, mass demographics that are not selling. Not even at comparatively cheap rates! (It's all been off the record, so I can't cite examples. It's off the record for obvious reasons as blabbing about it doesn't exactly help the selling process.) This says one of three things to me:

  • There is a lack of qualified ad sales people working in the online space
  • Advertisers don't yet value this market

Yes, I realize display advertising is a multi-billion industry and it's sustained sites like Yahoo-- my part-time employer-- not to mention offered a new revenue stream for dying print media (albeit an apparently anemic one). But if you consider the demographics and time spent on a lot of these sites there's clearly money being left on the table.

It's not too crazy to draw an analogy to Facebook's situation. (Bear with me, here.) Facebook is generating hundreds of millions in revenue this year. Clearly Facebook has ad inventory people want. But Facebook considers itself in the first inning of figuring out a must-have revenue answer for its unique inventory.

In short, for years now proponents of display advertising have been saying-- and blindly believing-- it's all growth until the percentage of time spent online catches up to the percentage of the ad budget spent online. Maybe we need to assume there's a deeper problem and the hungry company that wants to survive needs to work harder to fix it.


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spot on - exactly - as I have been hranging [sp?] on for years..maybe the downturn will actually spurr some innovation here and not shoving old ost-industrial age mass media metaphors online..rant done..;)

I haven't clicked on a banner ad in ages. With over 5000 brand messages a day coming at us, the entire concept of branding may, ironically, have become commoditized into uselessness. I had been thinking about this a lot lately, and then I came across the book "Obsessive Branding Disorder" by Lucas Conley. Great book. Everyone in marketing should read it.

Fortunately this isn't rocket science. Otherwise we'd be fucked.

Online display advertising is equally as ghetto as it is in the real world (maybe more); you get CPM which means "you pay for every 1000 eyeballs." Advertisers do not like this, and will pull back these dollars. It's long overdue. This is not what the Internet is for. Punch someone else's monkey please.

Text ads, on the other hand, are easily quantified. CPC means "you pay only when people click." Advertisers like that. There is also CPA which mean "you pay only when the person buys your shit." Advertisers love that. These are the things that make advertisers spend their dollars.

People will create new metrics for display advertising, like engagement or click-through and charge advertisers in a more transparent way. This is inevitable. The bullshit publishers and ad networks will disappear because not only will they be unable to convert, they can't even define "conversion." Advertisers will get fine-grained targeting (eg, "I want to target cute single girls who date fun geeky jewish guys.")

The future will come. MySpace's new advertising system is the closest thing yet. MySpace needs to blow it out to publishers across the Internet and not just use it on MySpace properties.

So let's make it rain, bitches. And before we make it rain, let's have a drought to kill off the weak.

"People will create new metrics for display advertising"

absolutely agree. the metrics are what is wrong right now - CTR, impressions ... these don't mean anything to marketers nor anyone outside of the digital silo.

The trick is to show people ads when they want to see them, that's why search is so effective.

Nobody has cracked it for social networks but someone will eventually and they will clean up.

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