Drama: Online Advertising Cat Fight to the Death

by Alphaville Herald on 29/03/09 at 6:50 pm

by Urizenus Sklar, from the Failed Monetizing Strategy Watch Desk

Joseph Jaffe and the Crayonistas have departed from Second Life, which is too bad because I would love to have them weigh in on this cat fight. Seems Eric Clemens of the Wharton School had the temerity to suggest that the online advertising business model was fail, and then all hades broke loose. I have to say that Clemens' main  points resonate with this online media mogul:

  • Users don’t trust ads
  • Users don’t want to view ads
  • Users don’t need ads
  • Ads cannot be the sole source of funding for the internet
  • Ad revenue will diminish because of brutal competition brought onby an oversupply of inventory, and it will be replaced in manyinstances by micropayments and subscription payments for content.
  • There are numerous other business models that will work on the net, that will be tried, and that will succeed.


It's time to start *charging* people to read the Herald!

6 Responses to “Drama: Online Advertising Cat Fight to the Death”

  1. FlipperPA Peregrine

    Mar 29th, 2009

    He’s on the right track, and this is coming from someone with an ad-supported service. Trying to get users to click a banner, even when they’re getting a great service for free, is very difficult. Potential ad buyers know this.

    That said, there are many more creative ways to add value to advertising on the web. For years, all we had were horrid, ugly, design ruining flash banners. Rather than use their imagination, marketers went straight for what they knew: the eye sore of a billboard with the annoyance of a volume blaring TV-ad. Google did not, and got create, showing relative text based links which complimented their service… and look at the success they’ve seen.

    People offering advertising space are going to need to get more creative. The micropayment system that Linden Lab put into place with the L$ has shown the way.

  2. Jordyn Carnell

    Mar 29th, 2009

    Trying to remember the line.. It goes something like this: “people pay attention to what they are interested in, and sometimes that’s an ad”

    Think that’s important for all publishers to remember. People will pay for what they are wiling to pay for. Provide it and you’re set. Ignore it, and you’re doomed.

  3. Kahni

    Mar 30th, 2009

    My 1L per visit magic chair gets me a lot more traffic than any amount of paid advertising.

    Nobody clicks ads.

  4. At0m0 Beerbaum

    Mar 31st, 2009

    The problem is ads have become so intrusive, and pushy, and there’s even malware to force ads upon you even when you aren’t browsing the web, that people have shut off ads in their heads. There have been cases where advertisement slots are bought by those who wish to infect your machine with malware, trojans, etc, either to fish for personal info, or to use your computer to DDoS random targets.

    People have associated ads with “bad, tainted, evil” and dont bother with them. The only ads I’ve ever clicked out of curiosity are google’s ads, which are not intrusive at all.

    The other issue is there is so much noise out there that if there is something worth clicking, it’s lost in an endless sea of shit.

    It’s a catch 22 though, without ad revenue, you’d start seeing less and less independent sites, and more pay services, and sites backed by the biggest companies, and the tiered internet wet dream that many US telecoms want to see reality would become so.

    Ads can be good and bad. If I wanted popups that evade my mouse and refuse to close, play loud noises, install unwanted software, exploit my browser, lag my system, and display unwanted imagery, I’d just load up GNAA last measure.

  5. IntLibber Brautigan

    Apr 1st, 2009

    I would dispute these claims attacking ads. Most people just don’t know how to do them well. However even minor effort can pay well. ace-exchange.com pays its dedicated server costs with its google adsense revenues (US110/mo), getting about 180k hits per month. We don’t do any other advertising on the site. Even a blogger getting a 10-20k hits a month can make 30-60 bucks a month off adsense, and adsense isn’t even one of the more lucrative models out there. Adsense works by click-throughs, so I wouldn’t make money if people didn’t click through on ads they found to be topical and contextual.

    I don’t think you could charge people to read the Herald. You aren’t the NY Times.

  6. Archie Lukas

    Apr 12th, 2009


    I avoid them like the scum that place them

    nuff said

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