Forum Moderators: skibum
The report states that advertising is a viable income stream for e-companies and that it is on the up.
Personally I think this report is just a 'booster' to propel interest and optimism and has little truth that advertising is indeed on the up.
For me advertising is still in decline, or at least stable in it's decline.
The general consensus is that advertising is in decline simply because the general users of the Internet are not clicking on them banners.
I beg to differ. Infact in my opinion this is way off the mark.
Greed and greed only is the reason why advertising is in decline IMOH.
It is down to perpetual greed by both the big on-line media giants such as Yahoo, MSN, AOL etc. and the large advertiser's/advertising agencies.
The report that I referenced at the top of this post just highlights this to me.
Lets take a nostalgia trip shall we.
Remember back in the good old days when advertisers were paying $35 US. per every 1,000 impressions?
Remember those sites that have large volumes of traffic, such as AOL, MSN, Yahoo and other portals?
Well back in the good old days those very sites made a mint because they displayed an advertiser's banner on their home page.
Did the advertiser's make a mint? No they didn't, they wanted to, but they didn't, not enough to justify their expenditure and certainly not enough to get a ROI anyway.
Naturally ad rates went down, way down, so low infact it become hardly worth the bother for all parties. In a sense the advertisers gained some common sense. It took them a while but they learned the hard way. They realised that they could not spend fortunes on advertising because they would struggle getting that all important ROI. Business sense or a reflection of belated reality?
Because of the low ad rates a lot of dot com companies went bust because they couldn't exist without the ad revenue - that was all they had to survive.
The websites blamed the advertiser, the general Internet user and everything and everyone for their decline.
The advertiser blamed the websites, the general Internet user and everything and everyone for their decline also.
Now your large on-line media giants were not as badly effected because they had an alternative revenue stream such as their services. AOL had their ISP services so did MSN among other services.
This should of been an awakening of reality for all concerned, a fact of reality that advertising did not and will not work at the rate they hoped it would.
However greed is something that will not and I doubt ever will go away.
Back they come again.
The likes of AOL, MSN, Yahoo etc. did not get hit as hard as most websites but they had seen from first hand that they could make a mint from displaying a banner on their sites. Easy money? Absolutely. But they have services to sell so why do they continue to chase advertiser's and maybe vice versa. Greed that is why. AOL and the likes have a huge operating cost and their services cost a lot of money to produce/offer. Sure they make a profit but that's not large enough for them. Advertising provided the likes of AOL etc. with a revenue stream that was large in profit and low on cost to them. They simply earned fortunes for putting banners on their site. Putting a banner on a site costs nothing, just server bandwidth.
It was almost a return of 100% profit.
This is why reports that I referenced at the top are being published, published by these big on-line media giants with huge traffic. Published to boost and retain the attention of business with the message "hey advertising does work". Note that the site refrenced at the top is somehow affiliated to Netscape. Who are they affiliated too?
I am sure it is a large on-line media giant!
So the message is that advertising is on the up.
Surely the advertisers have the common sense to remember the good old days, when they splashed out fortunes for banner placements etc. Surely they will remember that they didn't get the returns that they expected for their money.
That remains to be seen, greed is a deeply ingrained trait that is hard to resist - no matter what the cost!
I honestly can not see it getting back to how it was because it won't and does not work. That is a fact.
Sites that rely heavily on advertising will continue to struggle and go bust just like other sites have before them.
Advertisers will not be stung a second time - or will they?
Here's a crazy scenario. My site gets close to 400,000 page impressions a month. 2 + years ago when advertising rates went as high a $70 I could have conceivably been a millionaire within a year or so. Now that is crazy.
I honestly believe that greed is the single most contributor to the decline of advertising and partially to blame for the dot com bubble bursting, I maybe cynical, deranged or what ever but the facts and stupidity of it don't tell me otherwise.
In a way I think the web will be better for it - in the long run anyway.
Cheers,
Stickymaster.
My thoughts on this are as follows:
You have made some good points, I still think there is money to be made out of advertising, but it HAS TO BE directive marketing which can work for the advertiser.
I don't think we will ever see the days of $50 CPM every again (although it would be nice), but I have (personally) seen advertisers paying $10 CPM which is not a lot (compared to $50) but it is still enough for webmasters to make a living or at least cover the cost of hosting and the time taken to maintain the site.
The average now seems to be about $1/$2 CPM which is too low (unless your Yahoo :)) to make ends meet, but I think we may see an upturn in the CPM rates over the next couple of years as the internet settles down.
The thing with the internet is that as you have pointed out people threw money at it expecting amazing results, the money was thrown and the results never came. Hopefully we will see things pick up, but we would be stupid to expect the type of revenues that you *used* to be able to earn.
Yahoo and AOL haven't helped, but I don't think we can blame them, I think they just made advertisers realise quicker than they would have that high CPM just wouldn't work.
Anyway on a more positive note, let's all hope that the day comes when we can get at least $25/$30 CPM and all be extremely rich (again) ;)
best of luck to all in this ever changing industry.
dazz
The fact is, lots of advertising in ALL media is often non-productive. But on the web this can be proven, and proven very starkly -the results are undeniably in your face.
(edited by: tedster at 6:06 pm (utc) on May 18, 2002)
What we have to remember is that it's not just the internet, TV ad revenues have taken a dip aswell.
Plus we have an economic slowdown.
Things can only get better ;)
dazz
Tedster, if you only knew how much I've been addressing that particular point in the past week. In fact, here's a cut & paste of an email paragraph sent to a local government tourism agency just yesterday.
Here's the toughie, and I know it's going to take a while to effect the change, but you are all going to have to reassess your fixation on print and switch to thinking about the web FIRST, because the public has already made the switch (in your industry). Print needs to be revamped from the ground up, its focus needs to be as a collateral piece... NOT as advertising. Print advertising, dollar for dollar, is a colossal waste of money. You need to be advertising on the web.
Did it work ? ? :)
Any chance of you sending some letters for me ;)
dazz
I feel a major hi-jacking of this thread is about to happen, so I'll copy off a portion of it as a new thread
[webmasterworld.com...]
Marketers Turn To Web For Brand Awareness [adage.com]
Package Goods Marketing Continues Online Migration [adage.com]
Ford Makes Largest Ever Web Portal Advertising Buy [adage.com]
Samsung Massively Boosts Online Advertising [adage.com]
Most threads go one way then another way. Anyway the reason I posted the post that I did was to maybe start a debate about advertising and the thread throws some interesting things into the equation.
*diddlydazz*
I still think there is money to be made out of advertising, but it HAS TO BE directive marketing which can work for the advertiser.
I agree with you, there is money to be made via advertsing, my site is fortunate to be deoing so, not alot but enough.
I just think the real reason behind the decline in the advertising industry is due to the sheer greed, especialy among the the big 'players'. They literaly drained the life out of it when maybe they could have sustained the life by being a bit more sighted.
Cheers,
Stickymaster.
When ad agencies wake up en masse to the value of calculating ROI so directly, there will be an explosion.
As far as banners, it is entirely up to the market.
IMHO The real metric of how quickly web advertising will grow, is how much annoyance the user will tolerate. What is the boundary in the name of "branding" How many popunders or overs will a surfer endure before either a) finding a way to stop them, or b) Attaching a negative feeling to the advertiser?
(Illustration: I will not even consider going to Orbitz for travel. They have annoyed me endlessly for months - popunders everywhere. Yes, I know their name,they have Brand Recognition. NO I will not buy from them.)
In 5 years this will be the good old days :)
A number of large marketers are increasing there budgets on the internet. This is the yardstick being used by the 6 or 7 companies that are project advertising growth.
There is no conspiracy to pump up optimism to get the advertising spending moving again.
A different problem is faced by small businesses and at the moment more advertising doesn't seem likely to solve it. The budgets will continue to fall because they aren't getting a return on their advertisement investment.
In this two-tiered advertising market the big guys will thrive on mass marketing. The small guys will have great difficulties getting found.
Seach Engine Optiminization and paid placement and the thousands of tricks the well-heeled can afford are shutting out the small mom and dad websites.
One may still be a dog-breeder and succeed on the Internet but not a small book vendor.
Somewhere in the future a new Yahoo or Google will emerge aimed at these underexposed sites and breathe new vigor into them. The mom and dad's will spend for adverising again.
It is Capitalism and the Survival of the Fittest at work. The Internet is evolving.
I think if even the big guys are heading for subscription based services that their outlook must be at odds with this article.
And just to make sure this is not just a me-too post, can i ad that any upsurge may be due to a shuffling out of mainly spam get rich quick websites over the past couple of years, due not in a small way to how google was able to more effectively index quality sites. They now are fairly close to being (or already) the top search engines in terms of number of search queries. i agree with stickyman that "greed" killed the golden goose. But even more so ignorance.
Now that the web is being more acknwledged as a brilliant targeting and niche vehicle for advertising, sites with unique and valuable content are well placed to gain. Tedster was absolutely correct, not only can you target better now, but you can actually get valid feedback on number of exposures or click throughs. No way you can do that with a book or magazine, where you never really know how many "free" copies are included in their subs, how many were just never read or used for toilet paper, and how many people read each copy.
It was the one-size-fits-all with the old model of third party delivered irrelevant ads beings served up on any site regardless of content specialization - and then mainly to idiotic ads when you DID click - that killed the on line ad industry then.
Now people are realising they do have to be "smarter" and that means being smarter in source targeting. The keyword today is TARGET!
I feel that with all the large ad companies and search engine costs that the small, "shoestring" start ups or the Mom and Pop operations are left out in the cold. I thought a long time about this and decided on my own plan of site to site advertising.
(I know, Not very original) but I figure that if a person zeros in on a site that has the right demographics, a good amount of page views and growing, low cost monthly costs for banner or buttons, then that would make more sense than straining the family budget.
Growth for the site that buys the ads may not be as fast as the other ways but it is sure and steady...and cheap!
I just put up my own ad sales...no this is not a plug! But I have no idea if anyone willl go for it or not....
I personally think it is a good idea and I am searching for a site that compliments mine so I can buy advertising for my own sites.
Ann
