One of the reasons I'm skeptical about advertising going forward (among several) is that as metrics get good enough, advertisers are going to want to stop paying for people like me who are minimally affected by ads. ("But you're affected subconsciously like everybody els..." Yes, thank you, I said minimally.) And we're not going to be randomly distributed. You might be able to make an ad-based business in bulk or on a band fan club site, but technical sites are going to be in a lot of trouble, I think. Can you imagine being kicked out of a site because you never click on ads? The tech is coming.
Whenever I do that (rarely) I surf around the linked site a little bit. Will Google cancel accounts because the advertisers have low conversion rates? I could see them canceling accounts when a lot of visitors clicked the ad and stayed on the linked page for only a few seconds but I’m honestly wondering whether they will also cancel if a lot of people merely buy nothing.
Product placement may play a bigger role. Apple has already shown the world how effective buying/trading your products into 4 out of 5 TV shows and movies can be. I don't know how active major brands are in online placement, but the FTC disclosure rules are generally considered easy to skirt or just plain ignore by smaller players.
Looking around at tech blogs and social media it's easy to spot dozens of pieces a day that might as well be ads for firms like google, microsoft, samsung, amazon, apple etc. In many ways these are far better than display ads because of the engagement of reading and sometimes commenting on a piece. The measurable difference between some of these brand's #1 fans and paid promoters seems quite small. How sure are we that some of them aren't just ads already?
Wouldn't the solution be better approaches to ads? Something like AOL's Project Devil (http://advertising.aol.com/creative/projectdevil) seems to be the way web advertising should work going forward.
Tech sites will still run PR pieces, and the audience is valuable enough that many will run ads just for impressions. (eg. Microsoft, Apple, etc), or shift towards running more PR based ads. (eg. Corporate culture, etc)
You'll never be kicked out, at worse you'll be offered to upgrade to a paid account. Also, how much value is there in the people unaffected by ads commenting, submitting articles, linking to the site, etc.
The ability of tracking to get better is almost unbounded; the ability of advertising to get better is probably not. Given the way things are distributed, there is a segment of the population who will simply never respond to advertising the way advertisers would like and sooner or later they're going to be able to notice us.
And while I will (and did) concede that I am not magically unaffected, as I am human, I will point out that my actual economic decisions tend to come from non-advertising sources. When I have actual money to spend I look for reviews and the experiences of others. "But reviews are just ads too!" Not all of them, and I have gotten pretty good at finding the ones that aren't. I'm even pretty decent at reading through the reviews that are mostly ads. It's not that I'm unaffected, it's that I take paths they don't want me to take and I don't plan on stopping.
The ability of tracking to get better is almost unbounded; the ability of advertising to get better is probably not
Advertising will stop getting better once the only ads you ever see are for things you need right at the moment, in the exact place you need them.
my actual economic decisions tend to come from non-advertising sources. When I have actual money to spend I look for reviews and the experiences of others. "But reviews are just ads too!" Not all of them, and I have gotten pretty good at finding the ones that aren't. I'm even pretty decent at reading through the reviews that are mostly ads.
The perfect advertising system will be something you trust enough to substitute for reading reviews. You might think it's unlikely, but there are numerous precedents for it (eg, financial advisers advising you on things they are paid to sell).
It's true that there is an inherent conflict of interest between an advertising system and giving accurate advice. However, in the type of system envision the future value of your transactions though the system will be enough to provide a counter-weight to outright bad advice.
Then the ads got good enough that they started to advertise something that I might actually want.
The same thing will happen to you at some point - either it will be groceries that you can get cheaper at some other store or some product there really isn't a replacement for (say the Roomba, which as far as I recall is the only autonomous vacuum cleaner) which will save you a lot of time and/or effort.
i doubt they would kick anyone out--the site would just close.
sites like stackoverflow are possible because hosting costs are cheaper than advertising. even as ad profit per user decreases, hosting costs per user decrease as well.
similarly, i wouldn't underestimate the value (to the advertisers) of impression advertising--the masses of people who watch TV and click facebook all day define pop culture by these impressions.
The only ads I can ever remember clicking on were accidental.
The only ads that really make sense, I think, are the branding/image/guiding type ads, not the performance-based CTR ads that have taken over the tubes.
Toyota did a whole damage control series during the purported uncontrolled acceleration debacle, and I noticed them and it influences your opinion. As do ads that build an image or general awareness: If I know about a brand of SSDs, maybe I'll search for that brand the next time I'm looking.
Ads that succeed or fail based upon a click have always been dumb. Remarkable that Google built a whole empire on it.
One of the reasons I'm skeptical about advertising going forward (among several) is that as metrics get good enough, advertisers are going to want to stop paying for people like me who are minimally affected by ads.
Anecdote time..
Podcasts are still attracting plenty of advertisers, even with non-trackable generic ads, leading me to believe some advertisers don't care for tracking.
Check out Dan Benjamin's 5by5 family of podcasts - they're pretty much funded by advertising and most of it is poorly trackable. I don't know what he charges but from other similar podcasts I do know the figures for I have reason to believe it's higher than $50 per 1000 listeners per show - this is astronomical compared to trackable forms of advertising online.
I listen to a lot of podcasts and the ads they do register in my brain. I usually listen while doing the dishes or some such and I don't fast forward past them. Unlike visual ads, I can't look past them either. So I am consciously aware of almost all of them.
Some of his advertisers (and I have heard this in other podcasts, too) seem to be handing out discount codes (usually the name of the podcast or something like that) which would allow them to track their success fairly well.
I think cost of influence is a more important metric for judging how serious advertisers are than the overall size of a market.
Take television, for example:
"during the 2007-08 season, Grey's Anatomy was able to charge $419,000 per advertisement"
Independently, I found the viewing figures were 17-18 million per episode for that season. So about $24.65 "CPM". And that was one of the best mainstream, regular ad returns on TV (CSI had a higher audience and far lower charges per ad). That's half of what I know even minor podcasts are making..
On the flip side, a TV show tends to have many ads packed in whereas a podcasts runs with a few at most but in terms of CPM, they seem to trump most TV.
fascinating. I wasn't aware of the ad rates for podcasts. Are they for american audiences or overall audiences?
Because I would see Australian ads if I watches Grey's Anatomy or CSI -- but I hear the generic ads when I listen to TWIT.
My point was more that TV/etc is a fundamentally less trackable audience. (agreeing with your point that some advertisers don't require tackable ads).
Google's (core) ad business has less in common with traditional media advertising, and more in common with paying the store to put your product in a special display. They realized that people were using their search engine as a big storefront, and adapted the same basic model.
Display adds have definitely made an impression on me. But, for whatever reason, I tend not to click on the adds, but to open a new tab and google the product. I'd click on them if doing so did that process for me. I.e. "Click here to google <random product/service>."
I remember those ads. Every time one came on, my first thought was, "Oh yeah, this is that company that sent out those cars that tried to kill their drivers."
