It's Not Ad Standards That Have Killed The Online Ad Business

from the it's-crappy,-annoying-ads dept

Wed, Feb 11th 2009 7:43pm — Mike Masnick

We've been pointing out for some time that any business that relies on traditional display advertising to make money is in for a world of hurt because almost no one pays attention to those ads. There's a simple reason for this: they're not at all relevant or useful. They're often annoying. And, most importantly, they're not what anyone is on a page to see. When people surf to a web page, they're looking for the useful content -- and most advertising is not useful content.

This seems rather obvious, but it hasn't stopped some folks who tend to rely on such bad display advertising from trying to rationalize why that market is rapidly shrinking. The NY Times quotes MSNBC.com's president, Charles Tillinghast, who says the real reason that display advertising is drying up is because the IAB agreed to standard sizes for display advertisements earlier this decade. To him, that meant that the display ads were distributed everywhere via ad networks, creating over-supply and commoditization, driving down prices.

While I don't deny that there may be an oversupply -- I doubt that a more limited supply would have made a big difference. The problem isn't with the supply. It's with the demand. Most people don't want such useless advertising, so they ignore it (sometimes with help from Adblock). If you want to make advertising work, the issue isn't getting rid of standardization, or worrying about commoditization, it's about making the advertisements into good content that people actually want to participate with, rather than annoying "ads" that they want to avoid.

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Filed Under: ads, advertising, content, display ads, standards
Companies: msnbc

20 Comments

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Anonymous Coward, 11 Feb 2009 @ 8:39pm

It's not just that advertisement is largely ignored, it's that due to the proliferation of add ons (at least for browsers like firefox) like ad-block and No Scripts, many ads aren't even seen in the first place to be ignored.
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- Wladimir Palant, 12 Feb 2009 @ 12:34pm
  
  What proliferation?
  It's not just that advertisement is largely ignored, it's that due to the proliferation of add ons (at least for browsers like firefox) like ad-block and No Scripts, many ads aren't even seen in the first place to be ignored.
  Judging by the numbers from addons.mozilla.org, at most 5% of the Firefox users have Adblock Plus installed. NoScript's user numbers are around three times lower. Ad blocking solutions for other browsers are all awkward and therefore far less popular. And that's supposed to bring the ad industry down? No, the ad industry itself brought the ad industry down.
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Anonymous Coward, 11 Feb 2009 @ 9:07pm

>"ad-block and No Scripts"

The people who install those add-ons are so put off by ads that they cannot simply ignore them. I know that I have trouble reading text next to a flashing, moving, or even just a brightly colored static ad. They are distracting, useless, and a waste of my bandwidth. If I'm in the market for a product, I'll look for reviews, not advertisements.
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Anonymous Coward, 11 Feb 2009 @ 9:08pm

RE: 1
People install those addons because they don't want to see the irrelevant or annoying ads, they don't come standard in any browser that I know of at least.
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scott k, 11 Feb 2009 @ 9:14pm

ads? what ads?
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scott k, 11 Feb 2009 @ 9:14pm

ads? what ads?
i love my ad-blocker!
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Harry, 11 Feb 2009 @ 9:51pm

And yet...
...what is all over the right hand side of this page? If they are so ineffective, are they there for decoration? No. They are there because they provide you with revenue. The fact is, people DO click on ads. CTRs are not dropping. CPMs are.
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- Mike (profile), 11 Feb 2009 @ 10:23pm
  
  Re: And yet...
  ...what is all over the right hand side of this page? If they are so ineffective, are they there for decoration? No. They are there because they provide you with revenue. The fact is, people DO click on ads. CTRs are not dropping. CPMs are.
  
  We've said it before: if companies want to give us money for ineffective ads, who are we to turn them down? But, it represents less than 10% of our revenue, and if (when) it goes away, we're fine.
  
  Companies that rely on display advertising, however...
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Fred, 11 Feb 2009 @ 11:09pm

They are ineffective now...
But, that doesnt' mean they always will be. commercials still exist on tv. display advertising has its place, the question is how to do it right.

Some interesting ones include the apple ads previously found on nytimes, or the site take overs (using standard ad sizes) on sites like 1up.com

disclaimer: i am in the display ad business.
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- Anonymous Coward, 12 Feb 2009 @ 2:27am
  
  Re: They are ineffective now...
  Interstitals and site take overs are the ads I hate the most. They fundamentally interfere with my reason for being on the site in the first place: to see the content.
  
  Do they get my attention? Sure. But I'm just as sure the emotions they inspire aren't the ones your clients wish to be associated with their brand and products.
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danny, 12 Feb 2009 @ 12:43am

trad vs online
i think the nature of advertising changed with online ads. with traditional advertising you're not expected to get up and go buy absolut vodka right away cuz you saw it in the latest issue of stuff. but when you're in the liquor store, you might pick absolut cuz you associate it with your lifestyle(that magazine you read).

with online ads, web analytics and such, i think success is based on user clicks which i dont feel accurately portray the impact of directed advertising. users don't go to news sites to buy a sprint phone and contract. but they might go with sprint when their contract is up and they want a new phone because it suits their lifestyle (websites they visit).

the nature of advertising is kinda hokey; there aren't solid numbers to back it up but that's what business types are trying to do with user-clicks and web analytics. it's the wrong model for the industry so of course the market will shrink.
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David T, 12 Feb 2009 @ 4:01am

Text Ads are OK
I do like google adsense. Text only, so it's not obtrusive, and more or less relevant to what I'm looking at. Flash needs to be removed from the web. Why, oh why, is flashblock not available for Chrome?
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Twinrova, 12 Feb 2009 @ 5:22am

Ignorance is bliss.
"it's about making the advertisements into good content that people actually want to participate with, rather than annoying 'ads' that they want to avoid."
Once again, the bigger picture is lost. Ignorant remarks like this points out the supporters of a model which is slowly dying.

To refrain from the ads=content argument, I'm going to coin a new term called "content switching", because that's exactly what it is. I'll do my best to refrain from using the word "ad" as I continue.

Consumers are getting tired of being subjected to content switching, regardless if it relates or not. Applications such as Adblock (Mozilla's top add-on) and services like DVR fast forwarding are being utilized to stop this content switching.

And surprise! It doesn't matter if the content switch request is entertaining or not! If the content switch is entertaining, a consumer is likely to watch it once. But after that, the content request becomes annoying, not entertaining.

Rarely are these content requests optional, most are forced. We see this happening every day, with banner messages on websites or television shows, to billboards and magazine insertions. Consumers are just getting tired of it.

Why? Because most content switching requests rarely, if ever, relate to the original content to which the consumer wanted to see.

Even if it did relate, the problem then turns to repetition. Once, fine. Twice, pushing luck. Over that, and annoyance sets in.

Consumers are finally pushing back by using tools and services to stop the requests for content switching regardless of "entertainment" value.

Isn't it about damn time advertisers listen and just go extinct?
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J. Mitchell, 12 Feb 2009 @ 6:40am

They work for me
As a hobby+, I run a small, very locally-oriented website about the outdoors in my region. I sell ads to local businesses (such as B&B's) who, for instance, sponsor a page about a particular trailhead with a graphical ad. People visiting my site are often looking to travel to the area. They need a place to stay. The ads are relevant. Both my site's visitors and my advertisers are happy with this arrangement (and frequently tell me so).

I'll never get rich like this, but I don't see this business going away anytime soon. It's growing quite nicely, in fact. As long as I can keep lots of useful, up-to-date content on the site, there will be a place for graphical ads. But NOT for some random casino or online dating site my visitors don't care about...

My graphical ads usually end up being more relevant than the google AdSense ads that I display as well.
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Dave, 12 Feb 2009 @ 6:47am

But he's right!
If it wasn't for standardizing the size of beer bottles way back, people would still be drinking alcohol. I mean really, nobody drinks anymore and I think it was due to the fact that companies started using standard sizes of bottles.

I think we should go back to the days when all companies made their own bottles of what ever size they want so people will want beer again.
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Anonymous Coward, 12 Feb 2009 @ 6:50am

Good Content?
...it's about making the advertisements into good content that people actually want to participate with, rather than annoying "ads" that they want to avoid.

I think advertisers know this, but the problem is simple: if you're looking to make "easy money" then it is much easier to just spew out annoying "ads" than to go to the trouble of making "good content".
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What Ads, 12 Feb 2009 @ 8:52am

Ads Are White Noise
It seems to me that Ads have become 'clutter' to almost everything that used to be 'content'. A building can't be architecture, it's a Platex Cotton Bowl. TV is programming, it's a delivery system for commercials. And streets, like webpages, are just flat surfaces for tacky and stupid billboards. So I think I have learned to ignore them as I search for any relevant content.
Ironically, for many companies looking to be noticed, they're too lazy to target, monitor, and maybe drug-test the ad agencies and so appear in stupid places or come up with Ads that make me want to NOT do business with them.
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Ferodynamics, 12 Feb 2009 @ 5:24pm

I always look at advertising. How else do you know what people are buying?
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Anonymous Coward, 14 Feb 2009 @ 3:43am

If anything this points to a need for a more standard description language for telling advertisers what the site believes is on the page. (They should also download the page periodically to try to determine what content is hosted there using other methods.)

For example, a positive review of a product, display various stores trying to sell that product or keywords matching said product. If I'm on a page reviewing heat-sinks it'd be nice to see ads related to that class of heat-sink.

Less intrinsic solutions might be advertisements for media on pages of interested and such things.
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Alastair, 8 Mar 2009 @ 12:55am

Ads
Advertising pays the very costs of production, if you don't have ad revenues then you have to have subscription costs. I like ads and respond through them, I have found many things that I like because of ads. The only issue is the context issue. If people got the information they were interested in which was relevant to them then no one would complain. It is called the Semantic Web 3.0 and it is in development, unfortunately it is not yet perfected and still too slow by Google search return standards to be able to be used for daily use, but very soon we will be there and people will be able to have contextually relevant ads. So please stop complaining and show some support to advertisers who pay for the very information you are reading for free. Thank you.
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