Editore"s Note
Tilting at Windmills

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September 21, 2007
By: Kevin Drum

ADVERTISING ON THE NET....John Quiggin remarks on a downside of the failure of TimesSelect: "The Times decision has been motivated not only by the increasing costs of a closed system but by the increasing returns to advertising....In my experience, growing returns to advertising are being manifested in more, and more obtrusive, ads."

No kidding. Full page ads, blinking ads, Flash ads, ads that float over text, ads that expand suddenly as you're reading, audio tracks that turn on if you merely roll your mouse over the wrong spot — Madison Avenue's options for driving us nuts seem to be endless. But aside from the sheer annoyance factor of all this, there's yet another downside: advertising may increasingly be the only game in town, as John says, but the annoyance arms race is being driven largely by the decreasing effectiveness of web advertising. Clickthrough rates tend to be pretty abysmal on the internet, and advertisers are desperate for some way to actually grab readers' attention. But of course there's only so much they can do. At some point, if I don't need a new mortgage on my house, I'm just not going to read their mortgage refi ad.

Which is all bad news for the internet. Eventually advertisers are going to figure out that bigger, louder ads don't accomplish much and their conclusion will be a dismal one: (a) ads are the only source of revenue on the internet, and (b) ads are a pretty meager source of revenue on the internet — and there's not much to be done about it. A few search engines will do OK, but destination sites are going to be left without any viable revenue model at all. At that point, we will all be dependent on the kindness of strangers. (And Web 2.0 user-generated content.)

But who knows? The day is young and advertisers are nothing if not persistent and clever. Maybe eventually they'll figure out a way to jack their messages directly into our brainstems despite our best efforts to ignore them. The arms race is young.

Kevin Drum 12:15 PM Permalink | Trackbacks | Comments (56)

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Comments

You missed the grand unified Net Neutrality conspiracy theory.

AOL, Time, Yahoo, etc., want to control content on the net, so that favored sites will load and independent sites will slow down to a crawl.

The net effect, no pun intended, will be for internet content to become homogenized and boring. Eventually, the novelty of the internets thing will wear off.

Slowly but sure, we will leave our computers and get back to watching television as our primary time waster, where the advertising is more effective..

Posted by: zmulls on September 21, 2007 at 12:21 PM | PERMALINK

Perhaps that is why www.blanchedubois.com does so well.

Posted by: stupid git on September 21, 2007 at 12:22 PM | PERMALINK

Video remains the best method for advertising.

Last I looked, you can use video on the internets.

Did I miss something?

Posted by: Armando on September 21, 2007 at 12:23 PM | PERMALINK

Advertising is the devil's work: lies, half truths, and more damn lies. If they have to advertise the product, you don't need it. Ignore all ads.

Posted by: slanted tom on September 21, 2007 at 12:24 PM | PERMALINK

Some advertising is about transactions. Some advertising is about branding. Some advertising is about both. Web advertising will find its way. Also, web advertising doesn't and shouldn't function in isolation. It's just another channel at the end of the day.

Posted by: all's good on September 21, 2007 at 12:28 PM | PERMALINK

Quote from "North by Northwest"

"In the world of advertising, there are no lies, only expedient exaggeration."

Posted by: thethirdPaul on September 21, 2007 at 12:29 PM | PERMALINK

Why do you think advertisers are so eager to get tracking information on peoples' web surfing habits, and to correlate this data with customers' credit card and phone records? It's so they can push customized content to us. You may not be interested in a mortgage refi ad, but maybe you would be drawn to a fancy new restaurant in your neighborhood; advertisers can cut costs and increase the odds of a good hit with technology like this.

I am not happy about this invasion of my privacy (or about being typecast by advertisers) but this is what companies will be latching onto as the next generation moves online and away from passive modes of entertainment like TV and movies. And btw, have you noticed that movies in some theaters are prefaced by 5-10 minutes of real ads these days (real, moving ads, not just slideshow ads anymore)... you can't get away from this crap anymore.

Posted by: redys on September 21, 2007 at 12:30 PM | PERMALINK

"In the world of advertising, there are no lies, only expedient exaggeration."

Indeed. What does that O stand for, anyway?

Posted by: shortstop on September 21, 2007 at 12:32 PM | PERMALINK

"At that point, we will all be dependent on the kindness of strangers. (And Web 2.0 user-generated content.)"

the problem being...?

Actually, removing a great deal of the ads and ramping up the work of those who have a genuine passion for their message (i.e. user generated content) sounds like a fantastic deal to me.

Posted by: Tlaloc on September 21, 2007 at 12:35 PM | PERMALINK

Sorry to be the pedant today, but the brain stem has nothing to do with stuff like that, Kevin. The brain stem controls automatic functions of your body like breathing, pumping blood (and I guess the others like hormone release / peristalsis, etc.?) I guess you probably already know that and were just being devil-may-care about it, but I feel like fighting for human knowledge today.

Posted by: Swan on September 21, 2007 at 12:36 PM | PERMALINK

I've always wondered if television advertising is really as generally effective as it's made out to be. One of the big differences between the internet and tv is that when I don't click through to your crappy web ad, you'll know it immediately, but when I ignore your crappy Nissan ad, it's less apparent.

Posted by: Royko on September 21, 2007 at 12:36 PM | PERMALINK

The click-through rates may be abysmal, but so what? It's about revenue. Direct-market response rates suck -- but people still do it. The question is: can ads support any sites, and if so, what kind of sites.

Posted by: teece on September 21, 2007 at 12:36 PM | PERMALINK

Newspapers, namely the AP as an organization, blew it by not taking the Net seriously enough soon enough and therefore not charging Yahoo and other "content providers" high enough rates to recoup enough money.

If those rates had been charged, folks like Yahoo might well have instituted a "Yahoo Select," and, eventually, people would have come to accept it.

Posted by: SocraticGadfly on September 21, 2007 at 12:36 PM | PERMALINK

I think expectations just have to shift. Web sites sold "click through" as this wonderful, immediately measurable, feedback. But most advertising doesn't have that - print, television, etc. OK, that hasn't worked out so well, but the eyeballs are still in front of the screen (and increasingly, not in front of the printed page)and the advertisers are going to have to go there.

Posted by: MarkedMan on September 21, 2007 at 12:40 PM | PERMALINK

The key is actual *useful* advertising. Witness Penny Arcade. They're an online comic that produces 3 strips per week and a news post for each strip closely targeting hardcore gamers. Seven years of their back strips are all online. They make, I believe, multiple millions of dollars per year advertising games and selling branded shirts/books -- enough to support the two principals and a staff of 10 or so. The trick is selling ads their readers are interested in. They play all games before advertising them and only agree to sell the ad if the game doesn't suck.

So yeah, spamming mortgage crap all over when I'm definitely not in the market is stupid. But ads that match the website content will win.

earl

Posted by: Earl Hathaway on September 21, 2007 at 12:42 PM | PERMALINK

Take a look at Remove It Permanently

https://addons.mozilla.org/en-US/firefox/addon/521

Install this and RIP ads. This is even more bad news for advertisers. It also RIPS ads from the page of The Washington Monthly.

Posted by: mfs2 on September 21, 2007 at 12:43 PM | PERMALINK

Kevin didn't even mention the ongoing Darwinian escalation between Net ads and Net ad-blocking software. Unlike "passive" media like the newspaper and TV, ads definitely don't work if they're not even being seen.

Posted by: SocraticGadfly on September 21, 2007 at 12:44 PM | PERMALINK

If you use Safari, download the Saft plug-in:
http://haoli.dnsalias.com/Saft/

It has options for blocking ad banners and you can enter custom strings (which you need for those annoying "dancing" ads) along with pop-ups, page refreshing, images or other plug-ins.

Btw, the ads still load, they just won't display on the page.

Posted by: tom.a on September 21, 2007 at 12:51 PM | PERMALINK

Mfs, Tom.a, you can do somewhat the same on a PC with a Hosts file inside the system folder.

Posted by: SocraticGadfly on September 21, 2007 at 12:55 PM | PERMALINK

Swan: I feel like fighting for human knowledge today.

LOL. A tardy enlistment in that particular battle...but even soldiers are late bloomers sometimes.

Posted by: shortstop on September 21, 2007 at 12:56 PM | PERMALINK

Maybe they'll finally figure out that most of us are so sick and tired of being bombarded by advertising everywhere we go, that we have started ignoring it in any way, shape, or form. I instinctively flip both radio stations and TV channels when an ad comes on, neither of which I ever used to do.

Posted by: mfw13 on September 21, 2007 at 12:57 PM | PERMALINK

Kevin - well said! Especially annoying is that new Hot Searches on your site! By your criticism, are you biting the hand that feeds you???

Posted by: msoliver on September 21, 2007 at 1:01 PM | PERMALINK

"fighting for human knowledge"

More Thomas Pynchon.

Posted by: thethirdPaul on September 21, 2007 at 1:03 PM | PERMALINK

Most advertising on the Internet is ignored. Most advertising on TV is ignored too. Most advertising in newspapers, likewise.

The only exception I can think of is a recent ad run exactly once by a liberal group questioning the claims of a certain military officer about what's happening in Iraq.

If online ads had as much impact as that MoveOn ad, bloggers would be rich.

Posted by: JJF on September 21, 2007 at 1:10 PM | PERMALINK

Posted by: Swan on September 21, 2007 at 12:36 PM | PERMALINK

Oh for Christ's sake. First of all, you sound like an idiot. Second, the word you were looking for is autonomic. Third, hormone production is not connected with the brain stem. Fourth, your "fighting for human knowledge" line is laughable, coming from you. Fifth, that you think you are anything besides an annoyance is delusional.

Don't you have a freshman rhetoric class to get to? Run along.

Now back to ignoring your deluded smugness...

Posted by: Isle of Lucy on September 21, 2007 at 1:17 PM | PERMALINK

Earl Hathaway has it right. The key to successful advertising on the internet isn't in following the newspaper model using traditional display ads, but in the search engine model Google has made great use of. For example, I've been researching new siding for my home online, and Google places links to related content from local companies that, like, do siding. I've clicked on some of those, and they're happy and certainly Google's happy.

Posted by: David W. on September 21, 2007 at 1:22 PM | PERMALINK
Video remains the best method for advertising.

Last I looked, you can use video on the internets.

Did I miss something?

Unless the non-advertising content is also video, and the ads are integrated into the same stream, its often quite practical for the user to avoid the video advertisement while getting to the non-advertising content, which makes video advertising on the internet of less value than, say, video advertising on TV or in shopping malls, where your audience has more trouble avoiding the ads.

Posted by: cmdicely on September 21, 2007 at 1:23 PM | PERMALINK

I'm sorry...did you say something? I was reading about bloggingheads.tv, powell's book store and am 1260.

Oh well. I'm sure if it's really important, you'll put it in blinking flash on the side of the screen for me.

Posted by: stand on September 21, 2007 at 1:44 PM | PERMALINK

Perhaps that is why www.blanchedubois.com does so well.

Posted by: stupid git on September 21, 2007 at 12:22 PM | PERMALINK
________________________________________________
Ok, you got me. I now know the directions to some middle aged guy's place in Tampa.

Posted by: howie on September 21, 2007 at 1:45 PM | PERMALINK

Isle of Lucy, my comment is a pretty typical obliquely-topical observation people make on these threads once in a while as a courtesy to each other.

You wrote:

the word you were looking for is autonomic.

I actually know that word is used to describe these functions, but it doesn't mean anything to people who don't know it and "automatic" is good enough, since it basically means what autonomic means, except autonomic involves only the human body, but automatic refers to machines. When something's automatic, we don't use our volition to make the machine function, but when something's autonomic, we don't use our volition to make our body function. Most people know automatic, and don't know autonomic.

Your line about hormone production is irrelevant, since I wrote about hormone release, but not my question mark after my line about hormone release. I don't purport to have expertise in the human body, but I did learn about the functions of the brain stem at least a couple times over the course of my education. My basic point about the brain stem not having to do with understanding advertising is correct.

You sound like a jerk at least, or like someone who does not want liberals to share knowledge with each other, and thus be relatively informed, at most.

Finally, your comment about "fighting for human knowledge" being laughable coming from me is at best an unsubstantiated smear. This is proof that you are going out of your way to make me look bad on this website for some reason.

Posted by: Swan on September 21, 2007 at 1:47 PM | PERMALINK

but not my question mark after my line about hormone release.

should have been

but note my question mark after my line about hormone release.

Posted by: Swan on September 21, 2007 at 1:49 PM | PERMALINK

Isle of Lucy apparently noticed I was modest/polite about making my observation so decided to go for it trying to distort me into being something a far different person than I am.

Posted by: Swan on September 21, 2007 at 1:51 PM | PERMALINK

This is proof that you are going out of your way to make me look bad on this website for some reason.

You don't need my help for that. You do a fine job on your own.

As proof that you are annoying at best, I posit the following question: When is the last time you posted a comment that generated genuine discussion? Never?

Posted by: Isle of Lucy on September 21, 2007 at 1:55 PM | PERMALINK

I'm glad to hear that the "hosts" method of blocking content works for some, although isn't it something of a pain to keep up with new domain names/IP addresses?

I never did get this to work with Vista either which has the added "feature" of every so often warning me that someone has modified my hosts file.

Posted by: JR on September 21, 2007 at 2:03 PM | PERMALINK

Of course click-through rates on random Web ads are incredibly low.

If you're on the Web, and you want to buy something, why click on one of those ads, when you can easily do a search for the best price on the product you want?

As all's good said near the top of the thread, some advertising is about transactions, and some is about branding. Excepting very well-placed ads of the sort that Earl Hathaway mentioned here, successful Web advertising in random places is more likely to be about branding and reinforcement.

For instance, I almost never see a fast-food ad on the Web the way I do on TV or radio - but why not? Why aren't MickeyD's, Taco Bell, and so forth reminding me, as I sit at my computer, that one of their Big Macs or 7-Layer Burritos would really hit the spot?

Sure, there's no way to click through, but so what? Just like their advertising in any other medium, the point would be to make it a little more likely that I wind up in their drive-through line in the near future.

Posted by: low-tech cyclist on September 21, 2007 at 2:06 PM | PERMALINK

Advertisers seem to have a much higher expectation for ads on the internet than they would on television, radio or the print media.

If there is no click-through, the assumption is the advertising in ineffective. On television, their expectation is not an immediate sale (or you will welcome the distraction of their advertising so much that you will seek more information about their product, i.e., like clicking through), it is that the next time you are in the supermarket, you might be marginally more likely to buy their product.

I'm not sure why advertisers of products that are not sold on the internet rarely advertise on the internet because presumably it could have a similar effect to ads in other media.

Posted by: Ben Brackley on September 21, 2007 at 2:08 PM | PERMALINK

Autonomic v. automatic

Maybe in other places in the country people would insist on knowing the right word so they could put on airs, but here in NJ if we're not talking to a smart person, for most of us "automatic" would be good enough and we'd save "autonomic" for the classroom...

As proof that you are annoying at best, I posit the following question: When is the last time you posted a comment that generated genuine discussion? Never?

Yeah, whatever, you are a malicious jerk. Lots of us post comments that don't turn into discussions. My comments are fine and I am sure appreciated.

Posted by: Swan on September 21, 2007 at 2:20 PM | PERMALINK

It's at least possible that the online version of primary-raiders are a lot more vocal and less shy than genuinely appreciative readers of blogs.

Posted by: Swan on September 21, 2007 at 2:21 PM | PERMALINK

howie,

Instead of Tampa, try a Streetcar line in N'ahlans by the name of Desire. Blanche used to get her carfare through "the kindness of strangers".

What is in the water in New Jersey? - First, rick mick and now, the White Duck a paddling and piddlin.

Posted by: thethirdPaul on September 21, 2007 at 2:53 PM | PERMALINK

Kevin wrote "Which is all bad news for the internet."

This is wrong. Like saying that poor return rates for spammers is bad for email.

The TV advertising model is lame for non-broadcast media because the content is too specific, like Kevin said about mortgage ads. They will work only on blogs about mortage rates, on banking sites, on rate-searching web tools, etc. Oddly, making them into dancing pigs daring you to "choose your state" and posting them on any high-traffic site is a stupid game.

The joy of the internet is how content is intrinsic to the form. A page need only exist if there's something to put on it. Unlike broadcast, which is terrified of dead air, there is no need to even have a site if you have nothing to put on it. No news today? Don't post. Imagine a local TV news program or weekly radio show simply announcing "no episode this time---we've got nothing to say". Ads on TV work because they contain approximately as much desired information per second as most other things on TV.

But a paragraph-long blog post I choose to visit contains hugely more desired information per inch (not to mention per byte!) as the dancing pig Flash banner ad in the margin. Which is not bad news for the internet at all. Just bad news for advertisers who don't want to adjust their game.

Posted by: brent on September 21, 2007 at 3:19 PM | PERMALINK

Third Paul,

Of course I knew the reference (Sheesh). When people post fake web addresses, I'm just sometimes tempted to check them out. "Blanche"'s website is for some middle aged gay chap in Tampa, that's all.

Posted by: howie on September 21, 2007 at 3:22 PM | PERMALINK

LOL. Remind me never to piss off the redhead.

Btw, IIRC, all info from the higher brain to the body (and vice versa) passes through the brain stem, so I imagine that it is as good of a place as any to place a chip the purpose of which is to control our behavior.

Posted by: Disputo on September 21, 2007 at 4:36 PM | PERMALINK

I get a bit testy when my quiet lurking is disturbed by sheer, mind-boggling dipshittery.

Posted by: Isle of Lucy on September 21, 2007 at 4:49 PM | PERMALINK

howie,

I, truly, apologize and, that Tampa website is, indeed, a WTF moment. Wonder how Stanley feels about it.

Posted by: thethirdPaul on September 21, 2007 at 5:23 PM | PERMALINK

Eventually advertisers are going to figure out that bigger, louder ads don't accomplish much and their conclusion will be a dismal one: ...ads are a pretty meager source of revenue on the internet — and there's not much to be done about it.

Yet, advertisers have essentially no way to attribute revenue to ads placed on TV, Radio or print media, yet they continue to advertise there.

As William Hesketh Lever (aka Lord Leverhulme) famously said, "Half of my advertising is wasted, and the trouble is, I don't know which half." Why Mr. Drum would presume that advertisers would now know that advertising is wasted on all but a few Web sites is beyond me.

It's a bit early in the game to sound the death knell for advertising on Web sites other than top search engines.

Posted by: Edo on September 21, 2007 at 5:25 PM | PERMALINK

The future of advertising in general is what has everybody freaked out. Like it or not, the American economy is to a large extent dependent upon people buying things they don't really need. If we all started only buying stuff when we needed it, half of us would wind up out of work.

Posted by: dr sardonicus on September 21, 2007 at 5:39 PM | PERMALINK

And that's not all! Last weekend I saw yet another new form of advertising: a pitch for "Desperate Housewives" on the stripes in a parking lot! Check out this brave new medium at parkingstripe.com.

Posted by: Bob on September 21, 2007 at 5:42 PM | PERMALINK

Wonder how Stanley feels about it.

Maybe he feels like they've had this date from the beginning, tiger. I'm always suspicious of those more-macho-than thou types, aren't you?

Posted by: shortstop on September 21, 2007 at 5:44 PM | PERMALINK

As a subscriber to Washington Monthly (to support Kevin initially, but I do enjoy the magazine), I don't appreciate having to suffer the Hot Search ads.

Posted by: Mardg on September 21, 2007 at 6:47 PM | PERMALINK

The Hot Search ads might be more pleasing if it was a fireplace with the flames in it instead of some open BBQ waiting for hotdogs or marshmallows to come along. That would advance the theme of "real estate" a little bit more, but I suspect there is some sort of evil SATANIC logic behind the diabolical things.

Posted by: Doc at the Radar Station on September 21, 2007 at 7:33 PM | PERMALINK

Why am I getting AOL Hot Flash popping up on your site?

Posted by: shadou on September 21, 2007 at 8:18 PM | PERMALINK

Just use noscript.net.

Posted by: melior on September 21, 2007 at 10:51 PM | PERMALINK

How about jackass sellers on eBay who when you look at their listings hijack your computer with their moronic "selling environment"--computer scripts that take forever to load, tons of overdesigned crappy, flowery logos and backgrounds, and LOUD, IRRITATING MUSIC.

What if I'm listening to my own music on the computer? And then this blaring CRAP comes on and drowns it out.

It's so incredibly rude.

You can't even instantly close that browser window because it takes a few seconds for the computer to disconnect from all that garbage.

Posted by: Anon on September 21, 2007 at 11:55 PM | PERMALINK

Really?

I think of it as being SO much better an ad-ecology than there was 6 or 7 years ago, before browsers had popup blocking standard.

Posted by: Anthony Damiani on September 23, 2007 at 3:52 AM | PERMALINK

And yet, advertising continues in magazines and TV and Spam and on buses, etc, etc.

Advertisers work on the theory that if they cast a wide enough net they will catch enough fish to pay for the fishing boat. I don't see why it would change for the Internet.

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