For as long as there have been web pages and people needing to pay hosting fees and potentially make a living at running their websites there has been ad networks of all sorts trying to place ads on those sites. In most cases the real winners in the early days were the networks who kept; and still keep, the lion share of any money paid to them out of corporate ad budgets.
In the beginning it was just simple banner ads across the top of the page and sometimes at the bottom. As with all human nature of course greed set in. Site owners wanted to make more money so that made more ad space available and of course the ad networks wanting to siphon off even more money from the corporate wallet were glad to oblige.
Except at some point in all this wallowing in the ad dollar trough the people who actually had to look at these growing irritations said enough was enough and the beginning of the ad blocker software started to make the rounds. Faced with a backlash advertisers and their network ad pimps got sneakier with things like pop-under ads, pop-over ads or flash ads that could slip by the blockers – if only for a little while. In the meantime a lot of money was made around the table.
Where there were once ad blockers there was now a growing sense of ad blindness – where the blocker software wasn’t working peoples own natural ability to ignore ads improved. Then along came the ad dollar salvation for both the advertiser and the site – or as they are being called now – blog owners.
Google AdSense promised a nice clean way for advertisers to get their ads out to the public in such a way that they wouldn’t be offended or turn a blind eye. On top of that blog owners would be able to make a fair buck without irritating their readers in the process. It was a nice idea and for a while the plan worked out quite well – until as usual human green got the better of the less scrupulous who started slamming the web and blog backlinks with pages full of Google AdSense.
In the intervening years there has yet to be any kind of ad network that is concerned about anyone beyond the top 10% of the blogs. The rest of us are left to scavenge among the mediocre to downright spammy ad networks in order to try and make a dime or two. It’s not like AdSense is doing anything more than making themselves more and more money with little or no concern for the independent bloggers.
The tables are changing though and even the the big boys of the blogging world are suddenly realizing that their once iron lock on the top ad dollars isn’t so iron clad anymore. As Louis Gray said recently in a post
It is my belief that this problem, while exacerbated by the financial downturn, has been a long time coming. While Google made money hand over fist by pushing sponsored ads alongside native search results, their AdSense product, beloved by many bloggers, is often way off the mark when it comes to contextual advertising – and practically the only memorable online ads are those polluted by nonsensical dancing and misleading graphics that make you think you have a computer virus, or lie to you and say you’ve won an iPhone by being the 1 millionth visitor. I’d say we’ve come a long way from the late 90s when we were asked to “Punch the Monkey”, but we haven’t
The problem is that I believe that ad networks, ad agencies and the corporations they are sucking dry of ad dollars are still trying to do business on a web that no longer operates by the same rules and guidelines and traditional media or the old CPM model of Web 1.0. The moment that anyone was able to publish to the web and gain a loyal following of readers the CPM model went up in smoke. Just because a blog like Engadget might get millions of pageviews a month that doesn’t mean that it’s readers are anymore loyal advertising clickers than SlipperyBrick who might have a tenth of the pageviews but whose readership is more ad loyal.
People like Robert Scoble have been lucky enough to have been able to find advertisers who look upon their money spent with him as an investment rather than ad dollars blowing out the window. However he is unfortunately a rarity in that there are very few companies willing to go that route and if they do it is still with the big blogs.
What they haven’t seemed to grasp is the fact that there are a great many more blogs out there doing what Robert and the big boys are doing but have a much more loyal readership who would probably be more brand loyal to someone who is willing to sponsor a blog they really care about. The problem is that for independent and small blogs this is not an avenue that they have a chance to go down.
I know this from practical experience as I have tried. I approached the company behind one of my most favourite pieces of software; one that I have evangelized since almost day one, with the idea of them becoming a sponsor of WinExtra. I was told that as cute as the idea sounded this wasn’t something that they were interested in doing. their money was being directed at the bigger picture.
In his post on this Mark ‘Rizzn’ Hopkins asks if this is really the apocalypse as being foretold by Louis and Duncan Riley (The Inquisitr)
Is it the beginning of an end? The terminology Duncan used (“apocalypse”) might be a bit dramatic. Another ongoing story Duncan’s been chronicling lately has been the death of the print news business. More and more newspapers are transitioning online, and the ones who haven’t been moving that way are dying off in record numbers. Many pundits say that we’re going to be looking at a vastly different journalistic landscape within the next five years or so. I agree with them.
To that end, where do you think those ad dollars are going to go? Those same companies are going to need to advertise, and those same eyeballs are going to crave their news.
After all this I come back to one very simple and inescapable rule of the Internet. In order for the Internet to grow and develop it is going to take a lot of money. There is only one place where that money is going to come from and that is advertising.
Just as blogging has changed the Internet from a passive static set of pages into a living breathing entity that is forever evolving so will the way that we get the advertising that is the power that generates all these changes is going to have to change. The day of ad networks as we know them are history. Each and every day as the economic crunch claims new victims is another day where the Internet needs to find a new way to be able to fund its continuing growth.
Anyone who thinks that advertising is a has been that the web can do well without is living in a dream world plain and simple. In the coming years the cost of keeping what is now our social life blood is only rise but like all things in the real world that is going to take money. It is also going to take people like bloggers and services being able to make money in order to help expand both their own businesses and the Internet as a whole.
Our current way of advertising on the Internet is flawed – if not just plain broken and is proving that it isn’t up to the job of carrying this incredible invention forward. We need a new approach and one that is equal to all of us trying to do business on the web regardless of size.
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Good summary, Steven. When I tried to address this in 2007, I was told I didn't get it. When I said it in a different way in April of 2008, I was evil.
Now, it looks like more are realizing there are major problems. I'm lucky, so far, that I've never had to rely on the blog for revenue. I think it would be tremendously difficult and eventually futile. I am hoping Web services, who today are relying on ads, find new ways to make money and get profitable, so they can stick around. We poor schmucks who just write will have to do it for the love of it or somehow springboard the relationships into new ways to find cash, but I don't think ads will be the answer.
Good summary, Steven. When I tried to address this in 2007, I was told I didn't get it. When I said it in a different way in April of 2008, I was evil.
Now, it looks like more are realizing there are major problems. I'm lucky, so far, that I've never had to rely on the blog for revenue. I think it would be tremendously difficult and eventually futile. I am hoping Web services, who today are relying on ads, find new ways to make money and get profitable, so they can stick around. We poor schmucks who just write will have to do it for the love of it or somehow springboard the relationships into new ways to find cash, but I don't think ads will be the answer.
Here are some of my opinions on the digital marketing sphere:
Many companies set aside 10% of their turnover for marketing communications. Of that 10%, 90% is spent on media and 10% goes to creative work. So if you are in the media buying you just make 2.5% of the 9% spent on media and you end up addressing .2% or .3% of every marketing dollar spent, while your creative ad agency addresses 1% of the market. The total advertising business is just 1.3% of the marketing business. A distributor or reseller, on the other hand, makes 20-50% of the bigger pie, and if a digital agency occupies that role, they can make more money, especially in the pay-for-performance model where delivery in not charged. We run a customer’s e-business, get an order, collect the money and get others to fulfill the order. Potentially, you can grow that way much bigger than an advertising agency can. The key factor here is whether you can market online better than the marketer himself. At Pinstorm (http://www.Pinstorm.com), we feel the world is full of incompetent online marketers, and they all can be our clients. If we can deliver a sale, we can charge high margins.
The Pay-for-Performance model is unique for its integrated approach which re-bundles creative and media in the digital world. Pinstorm’s solutions are created across Display, SEM, SEO, WAP, SMS, Social Media, Viral and other digital media – while they are charged for only on a pay-for-performance basis. Clients don’t pay for strategy, creative, servicing or media – but only pay for the measurable branding impact and prospect responses generated. Pinstorm’s clients around the world include Yahoo, HSBC, Standard Chartered, Canon, and Panasonic, amongst others.
(Dislaimer: I work for a Pinstorm, a digital marketing agency)
Here are some of my opinions on the digital marketing sphere:
Many companies set aside 10% of their turnover for marketing communications. Of that 10%, 90% is spent on media and 10% goes to creative work. So if you are in the media buying you just make 2.5% of the 9% spent on media and you end up addressing .2% or .3% of every marketing dollar spent, while your creative ad agency addresses 1% of the market. The total advertising business is just 1.3% of the marketing business. A distributor or reseller, on the other hand, makes 20-50% of the bigger pie, and if a digital agency occupies that role, they can make more money, especially in the pay-for-performance model where delivery in not charged. We run a customer’s e-business, get an order, collect the money and get others to fulfill the order. Potentially, you can grow that way much bigger than an advertising agency can. The key factor here is whether you can market online better than the marketer himself. At Pinstorm (http://www.Pinstorm.com), we feel the world is full of incompetent online marketers, and they all can be our clients. If we can deliver a sale, we can charge high margins.
The Pay-for-Performance model is unique for its integrated approach which re-bundles creative and media in the digital world. Pinstorm’s solutions are created across Display, SEM, SEO, WAP, SMS, Social Media, Viral and other digital media – while they are charged for only on a pay-for-performance basis. Clients don’t pay for strategy, creative, servicing or media – but only pay for the measurable branding impact and prospect responses generated.
(Dislaimer: I work for a Pinstorm, a digital marketing agency)