

Why ads stopped working - kgermino
http://alexblom.com/blog/2009/06/overboard-why-ads-stopped-working/

======
mattmaroon
"Instead of plastering every available inch with an advert, showing restraint
and allowing few ads on a platform will likely increase their effectiveness
and value."

In the age of A/B testing, this is just incredibly stupid logic. If Myspace
has 17 ads on a page, it's most likely because multivariate testing showed
that 17 was the optimal number in terms of their eCPM.

It's always humorous when some guy with a blog assumes he knows better than
the company with a zillion page views per day and access to abundant
performance metrics.

~~~
_delirium
They probably have done A/B testing, but often it's over very short periods.
It may be that 17 ads is better than 5 ads in a 2-week test, but over a year
period underperforms, which is somewhat hard to test. In particular, it's
fairly hard to A/B test over multiple sessions in a way that consistently
assigns the same users to group A v. group B each time they visit the site, to
measure long-term/cumulative effects, like the hypothesized "more ads over an
extended period induces ad-blindness". With logged-in users, a site like
MySpace could do that, but then you run into additional social problems: if
over an extended period some people are getting 5 ads and some people are
getting 17, the people getting 17 are going to start noticing and be angry.

------
MDX
Just my 2 cents - I help run a company that sell products to middle America
(soccer moms, dads, kids etc) and the only advertising that has paid off for
us has been timely relevant advertising (Google, Yahoo, etc). We tried
Facebook, banner ads, etc with no luck.

We also started our own affiliate program (every customer automatically
becomes an affiliate) and trained our customers how to refer their friends and
family to us. That has paid off better than buying ads space on blogs or news
sites.

There may be some types of ads that do very well as banners on general news
sites (I'm thinking of those weight loss and bad breath ads) but it hasn't
worked out for us at all. It all depends on your market, the people who visit
the sites you advertise on as well the information contained in your actual
ad.

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ZachPruckowski
Part of the problem is that ad companies interpret "engaging" as "distracting"
and "annoying".

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resdirector
I naively contend that advertising is currently at a local maxima, but not at
a global maxima. I contend that for a really successful advertisement
framework two things must happen:

(1) Ad relevancy must be above a very high threshold, else users will filter
out _all_ advertisements, even if some are relevant. This threshold is
demographic dependent. (For HN crowd, I contend it would be around the 90%
mark...I, for one, still ignore gmail advertisements).

(2) Users must trust that the advertisement will give a good deal, else they
will just go to Amazon, eBay etc to buy the product instead. I think trust is
an often overlooked aspect of advertising, and is a difficult problem to
solve.

If ever I get around to building an advertising framework around my app, I
will attempt to err on the side of _not_ running advertisements rather than
risk losing the relevancy and trust battle.

------
btilly
Who is the king of advertising online? Google! Look at how they do their ads.
Yet they make more from advertising than anyone else, and if you measure
results give real value for money.

Sometimes people simply hear you better when you're not yelling.

~~~
natrius
Search ads are very different from content ads. People click on search ads
because they look like search results and they often give the user what they
were looking for. There isn't a huge quality difference between search
engines, so sticking ads everywhere would likely lead to an exodus of users.

Content ads make money because people see something that catches their eye
while reading the content they came to the site for. This requires having
several ad spots rather than just a couple at the top of search results.
Content is usually unique, so there's a high annoyance bar to reach before you
start to drive people away.

Yes, fewer ads make the ads shown more effective. I remember Hulu ads more
often than I remember TV ads. (Then again, I watch far more Hulu than TV these
days.) The problem with this approach is that advertisers aren't willing to
pay enough money to cover the losses from showing fewer ads.

What you and the author are suggesting is a demonstrably unsuccessful strategy
for someone who is running a website until you can convince advertisers to pay
more money for ads with less competition on the page. I don't think this is
impossible.

~~~
btilly
I agree that users get confused over what is a search result and what is an
ad. However Google _tries_ to make it clear which is which and to avoid
confusion.

However Google has ads in a lot of places other than search. And makes a lot
of money on them. Yet somehow they also haven't turned gmail, youtube,
picassa, and maps into banner-fests.

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byrneseyeview
Unfortunately, this seems to be completely wrong. In fact, the medium with the
most measurably successful ads is the infomercial--it's 100% ad. For any
purchase intent-driven Google query, you can be pretty sure that most of the
top ten search results are 'ads' (i.e. someone is spending time or money on
getting those pages to rank better, in order to sell a product), and that
business is growing fast.

It's unfortunate that people in the best position to talk about ads also find
them distasteful.

~~~
AlexBlom
I think the difference is that an infomerical is effectively one ad.
Personally I am not against marketing / ads at all, I just think they need to
be utilized properly.

The scenario I am speaking of is more akin to playing 4 infomercials at once.
Suddenly neither really catch our attention and have the chance to suck us in
like playing one infomercial does.

------
jsz0
For a site like Myspace with declining traffic I would guess they're simply
trying to make as much money as they can while traffic levels are still high
enough to make it work. Does anyone think Myspace can turn it around and start
growing again? I doubt it. They have no incentive to look at a bigger picture
of what's good for advertisers or visitors at this point. Might as well make
as much money as possible during the long drawn out death spiral.

------
iamdave
I endorse the movement that ads are doing more harm than good because of their
overabundance, though if users don't pay attention to seven ads that don't
"emotionally engage" them, why are they going to pay attention to one ad that
doesn't "emotionally engage" them?

~~~
kgermino
I think he's saying there is so much clutter with ads that users just ignore
them completely. Imagine if there was one ad at the top of HN's main stories
page: it would still have to be engaging to be effective but even if it is not
engaging you would still notice it and be more likely to remember what it was
for.

~~~
blahedo
...except for <a
href="[http://en.wikipedia.org/wiki/Banner_blindness>banner](http://en.wikipedia.org/wiki/Banner_blindness>banner)
blindness</a>, anyway.

~~~
Luyt
<http://en.wikipedia.org/wiki/Banner_blindness>

~~~
robryan
Easy to combat this though, a HN ad would just be a sponsored thread, although
people can eventually ignore this given the time that HN has ran ad free, if
there really was a need for an ad they could be really picky about only
advertising things that the community would be interested in.

~~~
comex
This is basically what Reddit does.

------
SlyShy
Precisely why targeted advertising networks like The DECK _are_ working.

~~~
webwright
Any data on this? I like the idea of The Deck, but I've never read any data
saying, "Ads on the Deck boost sales." I'd love to hear if that's the case.

edit: took a look at the Deck's page and they talk about "cost per influence".

~~~
SlyShy
They don't publish statistics, but at their rates ($7,900 a day, sheesh) I
find it hard to believe they'd have repeat customers if it didn't work. The
list of companies advertising includes a lot I've seen every single month
since the network started, so I think that's a good indication.

~~~
vaksel
it might work for advertisers, but as these guys themselves say: "We’re not
selling The Deck based on page views or hits or click-through, but if we were,
the CPM for a buy here would be priced well below industry norms."

So according to themselves, the publishers running these ads are making less
money than they would with any other program.

~~~
SlyShy
Six months ago (keep in mind the rate for an ad placement was lower back then)
I heard a figure of $4,000 a month for a Deck Network publisher. Which is a
lot better than I've heard of a similar Google Ads setup doing (it's about
enough space for maybe two text links).

~~~
natrius
The Deck requires you to only show that one ad on the page. You can show more
Google ads without losing readership. There is something to be said for the
clean, appealing pages that sites using the Deck end up with since they aren't
cluttered with ads, but that is likely (opportunity) costing the publishers
money.

~~~
SlyShy
Yup. The types of sites that run on the Deck (design, culture, etc.) find the
cleanliness a plus anyway. Another thing to consider is the people reading
those sites aren't your "everyday surfer" and probably completely tune out
Adsense and other ads, which hurts conversions massively. I ended up removing
Adsense from my site completely, because the small amount of money didn't
justify making the site uglier (I made up for it with increased donations).

------
jessriedel
Does the author think that advertisers and web designers are idiots? If the
websites could increase click-through rates just by decreasing ad density, why
wouldn't they?

~~~
drivingsouth
compromise? Sometimes, you have to consider different costs beside direct
revenue since that may be hurt in the long-run

