The biggest problem with online advertising is what happens after you click. Every time an extremely specific ad dumps you into a generic landing page or (worse) search results, that tells you "clicking on ads is a waste of my time". Every time an ad makes false promises of any kind ("PS3 for $21.97", "You won a prize", etc), it reduces the effectiveness of all online advertising because it conditions people to mistrust ads.
I think the only way to combat this is to have "branded" ads with guaranteed quality. Google AdSense was the first example of branded ads online (that I know of); they had a unique style that indicated "these ads are different". Unfortunately the style was quickly copied. The only solution to the copying problem is to brand ads with a trademark, e.g. "ads by Google".
The quality of AdSense ads has deteriorated over time, so "ads by Google" isn't a real indicator of quality any more, but I think the concept is good and there's room for a new "ad brand" that only accepts real quality ads. Ads that are honest, funny, pretty, respectful, and most of all take you somewhere good when you click. Perhaps iAd could be it.
It's even worse to watch the same 15-second ad for every 90-second video. It's like watching the last half-hour of a movie on broadcast TV in the 70's, only more so.
Repetition is the best way to get the message into the heads of viewers. For example, if I asked you about a specific ad that ran on "60 Minutes" on CBS tonight (assuming you watched it), you might have trouble recollecting it since it was but one of many. But if it was on Hulu, which repeats the same ad over and over at each break, it would probably stick in your head longer.
It's a case of inventory. There is a 'chicken and the egg' scenario in online advertising where you can't sell ads if you don't have enough 'inventory' (aka ad impressions) and you can't pay for marketing to bring more viewers/content without $$$ from ads.
So what happens is Hulu goes out and sells a few advertisers $100,000 in pre-roll ads. The advertiser is used to paying $15 per pre-roll so the Hulu sales people build some crazy equation based off of those two variables (sometimes they'll add in things like 'value adds' which are basically custom stuff that the ad agencies refuse to pay for) and come up with an impression goal.
You read that right, the # of impressions per campaign is solely based on the price of the unit and the amount of the ad buy. It's left to the Adops division to see if they can actually FILL that order.
Generally, you'll find that companies like Hulu oversell their inventory between 25-50%. They either underdeliver, hope for some big Digg's or other traffic spikes, or cheat by outsourcing the impressions to other networks.
You can tell when Hulu or someone else REALLY fucked up when you see the same ad over and over again for a few days.
He's correct that repetition does drive things into our memory. This is the whole idea behind 'behavioral advertising' (google it for full explanation).
The theory:
If a user has visited Amazon.com and browsed Digital Cameras lately, I'm going to drop a cookie and pass that to my ad server so that whenever he goes to Dictionary.com, I can show him an Amazon.com Digital Camera ad.
I have metric anecdotes (that is, anecdotal remembered knowledge that, at some point in the past, I read about people who collected lots of data, analyzed it, and found a correlation.) I don't know whether that counts as an anecdote, as data, or somewhere in-between, though.
The article raises some interesting points, but I don't think it explains why traditional advertising generates so much more revenue than digital advertising. Is print advertising overpriced? Are digital ads an inferior format? Is it perceived value? What explains the huge difference?
Well I can gather two things from this article. 1, the Washington Post is very definitely not involved in the digital advertising industry; 2, the Washington Post does not deal with a decent digital marketing agency.
"Lazy" is a remarkably strong term for many agencies whom, in my experience, often work around the clock to deliver on tight deadlines and low budgets, as clients still do not consider digital as important as above-the-line media. With extreme constraints, some of the most interesting conceptual work tends to come from digital agencies, who are forced to push limits in a constantly changing environment, with high demands from an intelligent user base who are not interested in simplistic and overdone banner advertising (which seems to be the focus of this article!).
Innovation is exactly the name of the game when it comes to digital marketing. Take Farfar's tremendously successful campaign for Diesel (http://www.farfar.se/awards/cannes2007/heidies/), or R/GA's Nike+ campaign, which received numerous awards and incredible ROI (Google it), or Crispin Porter and Refresh Partners' Whopper Sacrifice Facebook campaign for Burger King, that was so successful in its execution that Facebook had to kill the application, or even AKQA's campaign for VW, which relied on nothing but an iPhone app (http://www.facebook.com/video/video.php?v=324848336756&r...)
These are but a few of the very successful, innovative, forward-thinking digital marketing campaigns and strategies out there, that are so far beyond a simple banner ad and truly identify the kind of industry that digital is all about. The question "Why is digital advertising so lousy?" is a useless question, and is simply responded to by the fact that only lousy digital advertising is lousy, very similar to lousy advertising in other types of media. Just think of the pamphlets that are handed out on streets, or left under your car's windscreen wiper, or the terrible infomercials on TV or adverts with bad acting, or big billboards with no thought behind them.
I think the first point is utter hooey. Online advertising is worth less than online for two reasons
1. It's measurable. Unlike print it's not about the number of people who may have seen your ad. Its about the number of people who did, or even who clicked. That's a big difference. Companies aren't wicking to apply the traditional brand marketing fullsnto online.
2. Kids are much more banner blind then previous generations. They have grown up saturated by ads and ha e developed banner blindness. However because of point 1 this now has a direct impact on the bottom line of the publisher.
Not too smug; the word is lazy. Smugness is a cover for lack of imagination and drive.
And it's human nature. Most want to turn the crank, the same as they did yesterday, collect their pellet, and strut around the barnyard. Nothing wrong with that as a life plan, but it's not the way to innovate or change your business.
I would argue that people in advertising are not smug or (abnormally) lazy. They are scared.
For every great advertising campaign that ends up all over twitter/facebook/etc, there are 10 that bring consumer complaints, shame, and a negative image. People are scared to try new things because their client might get mad and fire them.
To understand why this mentality exists, you need to get the 'media landscape.'
The Client - Whoever is paying for the advertising. This could be Pepsi, Coke, or Trojan. Generally the actual person is a high-powered marketing exec with a VP+ title.
The Media Agency - A middle-man group that manages the 'campaign' on behalf of the client. They recruit the different groups involved, pay them a bit, and run all the numbers for the client. In the end, they are judged on 1-2 'metrics' that the client cares about. This could be 'Performance' (# of ads clicked vs. ads viewed), 'Engagement' (# of times people click the play button in a video player, for example), or 'Share of Voice' (percentage of a website's views in a given time period that the brand owns).
The Media Agency boss is generally a 40-something advertising hotshot. He is hands off on nearly everything once his company signs an exclusive deal with the brand.
The Media Agency worker is generally a 20-23 year old who couldn't decide on a major in college so they went with 'international business.' They don't really use the internet much and are judged solely on the metrics mentioned above.
In the end, advertising deals are closed based on:
-Buying the agency a stripper or tickets to a hockey game
-Being friends with someone at the agency
-Being a website that someone at the agency visits every day
I can go into a ton more detail on things like the ridiculous 'RFP Process,' Creative Agencies, and other stupid advertising things if the interest is there.
p.s. I've worked in online advertising for the past 3 years and have no idea wtf the word 'media' means.
I think their fear stems from something else entirely. While what you mention is indeed a factor, I think the greatest factor is the fact that on the internet, ROI can be calculated. The metrics are much more precise and I have a feeling that there's been a LOT more money spent on advertising than was ever justified.
I think this is just the effects of greater transparency on the client side. When the client can measure effectiveness, advertising prices plummet. I think the current dismal advertising revenue on the internet is actually what advertising revenue should've been all along.
To elaborate: If text ads are cheaper and demonstrably more effective than multimedia ads, and text ads can be created by literally typing for five seconds and letting the computer pick which line works best, then what does this imply for the careers of the Big Thinkers at the ad agencies?
Here's a scary prospect: most insurance companies could fire everybody they have working in advertising, replace them with one 22 year old English major tasked with writing PPC copy, and make hundreds of millions of dollars.
I don't think we're necessarily overspending on advertising... we're just overspending on ineffective advertising.
I agree that on a straight CTR calculation, ad agencies could make a killing on text ads.
However, I also firmly believe that you have to pay more to effectively reach certain people.
Example: Men tune out banner ads. Especially internet-savvy ones. If you want to reach them, you have to either do something incredibly cool (like sponsoring FilePlanet to have no download queues for a day or Virgin America to have free in-flight wireless) or incredibly annoying (like those big 'stunts' you see on nytimes.com occasionally).
You have it half right. Online advertising is helping to show that the effectiveness and efficiency of advertising is a chimera. The other half is that the nature of media is changing from a strictly on to many relationship to a many to many relationship.
Not only can't you control the message to your customers/consumers, but you can't shut off the flow of information between customers and, even worse, you can't stop the flow of information _back_ at you from your customers. In this kind of climate, trying to patch over a flop or take credit for a win is very difficult.
And it doesn't help that the economy is in the toilet while all this is going on...
People in advertising are _always_ scared. It's the norm. And the strippers, old boy network, kick backs, executive pecking order, etc. date back deep into the last century, and probably earlier. None of that is new.
If you want a superficial, but entertaining look at the ad biz, watch a season or two of Madmen. While the glamours aspects are showcased, the back stabbing, deal making, personnel dance is right on. I've been in and out of advertising for nearly 30 years and it hasn't changed noticeably in my experience.
What's new is the general over all drop in revenue. In the past agencies and clients danced around and slept with each other, deals passing from one group to another. People moving between agencies, partnerships forming, dissolving, and recombining.
The game required quick wits, but no new science or theory. The old scared people made the deals, and the young scared people did the work.
New media here and there, and changes in technology could impact a round or two, but nothing like what has been going on the last 10-15 years. And the last 4 or so years have been calamitous.
The old well is drying up, the old dances no longer work, so the people just dance the old dances and try to pretend its business as usual; turn the crank and hope there's still some water in the bottom of the bucket.
But no one seems to be interested in doing the work to dig a new well.
I think the only way to combat this is to have "branded" ads with guaranteed quality. Google AdSense was the first example of branded ads online (that I know of); they had a unique style that indicated "these ads are different". Unfortunately the style was quickly copied. The only solution to the copying problem is to brand ads with a trademark, e.g. "ads by Google".
The quality of AdSense ads has deteriorated over time, so "ads by Google" isn't a real indicator of quality any more, but I think the concept is good and there's room for a new "ad brand" that only accepts real quality ads. Ads that are honest, funny, pretty, respectful, and most of all take you somewhere good when you click. Perhaps iAd could be it.