

Newsflash: Display Ads On The Internet Don't Work - pchristensen
http://whydoeseverythingsuck.com/2008/04/newsflash-display-ads-on-internet-dont.html

======
nostrademons
This article makes a huge mistake that many entrepreneurs also fall victim to:

You and your friends are not the Internet.

There've been studies done on who clicks on ads (one was even linked here).
It's midwestern housewives, the same people who watch daytime TV and enter
magazine sweepstakes. I don't know a single person who watches Jerry Springer,
enters sweepstakes, or uses MySpace over FaceBook, yet those people obviously
exist. They're worth billions of dollars.

For that matter, my friends usually don't pay attention to TV or print ads
either. They Tivo past the commercials or get their TV episodes off
BitTorrent. They skim past the advertisements in magazines. They only look at
the newspaper classifieds if they're actively looking to buy something.

A bigger problem for entrepreneurs is that roughly 99% of startups seem to
target the same 10% of the market - the part that _doesn't_ click on ads. If
your users come from TechCrunch or Digg or news.YC, it's a pretty good bet
that they've learned how to filter out ads. Most of the big consumer-web
success stories - MySpace, PlentyOfFish, and lots that we don't hear about
because they're not plugged into the Silicon Valley scene - succeed _because_
they target a demographic that most of us can't identify with.

~~~
hank777
actually, as the commenter below indicated, according to jackob nielsen's
research, I am absolutely right.

<http://www.useit.com/alertbox/banner-blindness.html> Summary: Users rarely
look at display advertisements on websites. Of the four design elements that
do attract a few ad fixations, one is unethical and reduces the value of
advertising networks.

The unethical here is tricking people into thinking popups are system dialog
boxes.

The economics of the situation are clear. 100,000 magazine readers is a
business. 100,000 web readers is lunch money.

~~~
JayNeely
I'm sorry, but you've completely ignored the comment you're replying to to
make an unsubstantiated point. Nostrademons pointed out current research that
states clear demographics interested in advertising. Jakob Nielsen's research
presents generalized findings that don't contradict the research Nostrademons
is referring to.

~~~
hank777
actually no I am not ignorning his point. Its just not statistically
meaningful. The truth is that ___of the people that click on ads_ __, they are
midwestern housewives. But there are statistically not enough of them to make
many services that rely on them profitable. TV and print are broadly
successful at attaining users attention. The web is not - at least for display
ads.

------
joshwa
Well, he's right, though not exactly for the reasons he states.

Display ads _are_ in fact worth much less than search ads, for most web sites.
Display ads aren't about clicking, they're about exposure/influence (kind of
like outdoor or TV ads without an explicit call to action). There the CPMs are
much lower, since they by definition less effective at producing sales.
(though they are not completely valueless, since eyeballs without immediate
conversions may still eventually convert)

He's also right that most people's idea of "making money on the internet with
ad-supported" has in mind the glory days of $4 CPMs on banner ads. We haven't
been there since '01 or so. So everyone's economic model is screwed up.

There are only two (and a half) ways to make money with ad-supported content
on the internet:

\-- 1) Conventional CPM display ads-- but you have to have _millions_ of
pageviews a month, and extremely low marginal costs, to make this profitable.

\-- 1.5) Conventional CPM display ads, but on a extremely valuable niche site
(e.g. a forum for doctors or lawyers). Here, though, there are probably more
profitable ways of monetizing than ads.

\-- 2) Extremely SERP-friendly content with adsense/affiliate ads: If your
content is targeted enough that it appears in a Search Engine Result Page (or
if you can arbitrage the traffic through paid search), then you can get
visitors who are in search mode (marketers call this "intent"), who will click
through to your site, and then click an ad _on your site_ related to their
search. Think "mesothelioma" splogs.

If none of these work for you, you should consider alternate monetization
methods (freemium, subscription, traditional bizdev/affiliate programs, etc).

------
mosburger
I mostly agree with the author, but I also think it depends a lot on the ads
that are used.

For instance, I think most people have become very good at mentally filtering
out Google AdSense ads. But relevant, attractive, eye-catching advertisements
still work occasionally.

Case in point, I have a site that I run mostly as a hobby (shameless self-
plug: <http://devfunnel.com>) that has both Google AdSense and SnapTalent ads.
The SnapTalent ads have always fared a LOT better than the Google Ads. I think
the reasons for this are 1.) People tune out Google Ads, and 2.) The
SnapTalent ads are more relevant to the readers, and often the verbiage on the
ad attracts users' attention.

I also tried to make the ads blend in with the site visually.

I've gotten similar results on my blog (I guess I won't shamelessly self-
promote my blog). The AdSense ads are largely ignored, the SnapTalent ads get
hits. I've removed the AdSense ads from the blog because they were kinda tacky
and not making money anyway.

And, no, I don't work for SnapTalent. :)

~~~
llimllib
> <http://devfunnel.com>

errm, 404

~~~
mosburger
heh - I just uploaded a tweak to it just moments ago. :) Pretty bad timing on
my part!

------
JeffL
Internet ads do work in certain situations.

I can see why print ads would be more effective for things like brand
awareness for large companies, but I can tell you that running a small MMORPG,
I am getting over 3:1 return on investment on Adwords image ads.

If I ran a print ad, people would have to care enough about the ad to put down
their magazine, go over to their computer, type in the URL and then play the
game. Banner ads catch people who may be idly clicking through gaming sites
and are just as happy to click on my banner ad as any other link. And that
click and subsequent download are so easy compared to what would have to
happen with a print ad, I find it really hard to believe that print ads would
have a better ROI, at least with the budget I'm spending at which is about $4k
per month.

~~~
rms
>I am getting over 3:1 return on investment on Adwords image ads.

I think you are the exception to the rule with that ROI.

------
raheemm
He makes several good points about how internet ads are ugly, easy to ignore,
not as sticky as print ads, etc. In spite of these drawbacks, internet ads are
compelling for providing ROI metrics and targeting abilities. And they are
gaining in sophistication everyday.

The next round of ad serving technology being built now will be all digital
and medium agnostic - you can push your ad on radio, tv, browser, social
networks, apps, billboards, etc all using a single interface with granular
targeting, ROI reports and even retargetting based on geography, past history,
relationships, etc. Think Minority Report.

------
Readmore
I disagree, I think display ads work much better than text ads. Display ads
have the benefit of always being SEEN, which means that I'm getting the
message the advertiser wanted. When I see display ads for some TV show, game,
or upcoming movie it registers with me even if I don't click though on the ad.

~~~
mtts
Jakob Nielsen says you're wrong:

<http://www.useit.com/alertbox/banner-blindness.html>

And my own very advanced N=1 research on myself says that too.

~~~
Readmore
I'm sure Jakob Nielsen can make his statistics say anything he wants, just
like everyone else's statistics. All I'm saying is that I hardly, if ever,
click on a text ad but I do see banner ads. Different kinds of web surfers are
impacted by different advertising schemes, we can't always fit everyone into
one little box.

------
ArcticCelt
Even spammers make millions, this guy thinks that because he doesn't
understand how online business works, online business doesn't exist.

------
allang
I don't buy it. Where are you getting your information, or is this just
conjecture?

------
wumi
i click through ads in Gmail and I also click through some of the products
Amazon recommends. why?

because they're actually relevant to me.

------
LPTS
There are practical reasons ads don't work, but they are bad for other
reasons.

Display ads also suck because it's really hard for life to have meaning when
what you do with your precious time on this planet is manipulate other humans
into harmful economic behaviors. It must be hard to make a living selling a
certain kind of advertising and not want to kill yourself, or at least realize
deep down in your soul that you truly suck on a cosmic scale and when you are
breathing your last breath, instead of reliving your life, experiencing the
iconography of whatever religious superstition you happen to believe, or
dissolving into blissful non-being, your consciousness will expand into a loop
of all the disconnected distracted moments when people clicked on your shitty
psychologically manipulative ads running over and over again. Just your soul,
or whatever component of your waking experience that is responsible for your
experience feeling like it's yours, and the endless distraction for an entire
cycle of existence. The people who create shitty advertising must be aware of
this, but incomprehensibly go on advertising, making money manipulating
morons, and ignoring that increasingly desperate little voice that tells them
everything is wrong, by increasing the level of distracting surface activity.

I hate advertising so much. As children of whatever beautiful, chaotic,
creative force is responsible for our existence, we have to be able to do
better then this. There is a practical case against advertising as a business
model, but there are also other more meaningful considerations. Is a life of
bad advertising and lying to yourself about the morality and implications of
what you are doing really why you exist?

(Sorry for my (slight) rhetorical extravagance. I was reading Thomas Ligotti
earlier with my coffee.)

