the future of internet advertising

[TCO]

This url http://wire2k.phpwebhosting.com/wwwt...sed&sb=5&part=

posted in the UGO deathwatch thread has a really interesting discussion. It's not just about UGO or about popups, but about the future of internet advertising. I thought maybe we could have a little discussion here about where people think things are going in general. From a higher level, not just MarkG and Apolyton's issues.

[Eli]

What?

Nothing about branched threads?

[Panda]

The Economist had a couple a intereting articles in last weeks (Feb 24th) edition. This article <a href="http://www.economist.com/displayStory.cfm?Story_ID=513133&CFID=326145&CFTOK EN=51684932">Monetise this</a>, and <a href="http://www.economist.com/displayStory.cfm?Story_ID=513117&CFID=326145&CFTOK EN=51684932">Banner-ad blues</a> offer interesting reading.

BTW, I have a subscription so have full access to the on-line articles and I'm not sure these are PD. If you can't access them you can register for a trial which will allow you free access to 10(?) articles.

To summarise:
1. Advertisers will be paying less overall.
2. Middle-men chew up 50% of advertising revenues.
3. Advertisers will pay more for specific advertising. This will involve:
a) Targeting sites whose content is appropriate to the product, or
b) Sites selling customer tracking information to advertisers to allow them to specifically target customers whose profile matches companies requirement. Ie if you visit related sites and purchase goods on-line, the companies will want to know and pay money for that information.
4. Advertising at the moment is too passive and boring. One answer is to design more interesting adverts to grab people's attention; another is to make ads more intrusive to the browser - pop-ups like this e-bay thing.

Personally I think that's rather negative to the browser and will discourage internet usage. Another factor is the expansion of more cable/broadband access and the telecomms companies' success and/or compliance in the case of British Telecom, of allowing other Telecomms access to the local loop. This will allow faster data transfer speeds and so the time it takes to download the ad crap will seem less burdensome.

Personally I think commericalising the internet, and the persitant use of intrusive advertising will only be a bad thing.

[-- but not Snapcase]

It was bound to arrive eventually, though, wasn't it? UGO simply did not have a valid business model, and all of this bubble-busitng was going to fall out on consumers eventually.

I personally would welcome change #3, which would lead to ads not advertising @%#$ing american products and services coming to my browser. Honestly, this should be done already.

[DanS]

Very interesting thread, GP. I think it comes down to a lot of business models that were too ambitious from the beginning. This situation calls for feeling your way as a businessman, because everybody's blind.

(1) Advertising on the internet should be useful to me, but I have an amazing disconnect with most of the advertising that is placed. It's almost as if people are trying their best to be as irrelevant as possible with my eyeball time. They place ads that would never interest me, let alone make me click-through.

(2) Ming says that internet advertising is very expensive on a per-impression basis, and he has industry knowledge and experience on his side. I don't know whether it is the cost of bandwidth and infrastructure, or lack of scale on any part of the chain or what. Maybe advertising on the internet is an inherently unprofitable endeavor (as counterintuitive as that might seem).

(3) This might just be proof positive that the internet business is more cyclical than most industries. By my estimation, this business cycle was about 2-3 years. Boom and bust could be de rigeur.

All of this being said, there are many internet communities out there that are very valuable to producers. I don't doubt that the producers will try to tap these communities in some way.

[Ming]

The story in the Economist, which Andrew Livings was nice enough to provide a link to, is a great article. It is a very acurate picture of what's happening in the industry right now. Even the Cost Per Thousand (cpm) figures provide are right on target to what we are paying for banner advertising.
If you do read the story, it will give you a great perspective on why things are the way the are

[TCO]

Ming,

It seems like there are two models of internet ad:
-either annoying popups/monkeys (with still minimal content)

or

-small minimal content passive ads (best analogy is a bulletin board ad)

What about a different type of ad with more text content. Something with a hook and a story to lure you into the more heavily advertised space. Lots of people READ on line. An ad that is like a snippet of a newspaper article (with more content on the next screen) would draw me in...just like the above the fold newspaper first paragraph draws me in and gets me o buy the newspaper...

[MarkG]

<center><table width=80%><tr><td><font color=000080 face="Verdana" size=2><font size="1">quote:
<img src="/images/blue1.gif" width=100% height=1>
</font><font size=1>Originally posted by CapTVK on 03-11-2001 12:03 PM</font>
Has anyone noticed that there is an apolyton.net but no apolyton.com?
<img src="/images/blue1.gif" width=100% height=1></font></td></tr></table></center>for some reason it has stopped from working. our tech is looking into it...
<center><table width=80%><tr><td><font color=000080 face="Verdana" size=2><font size="1">quote:
<img src="/images/blue1.gif" width=100% height=1>
</font>Or that there's a sponsor window on the main forum screen?
<img src="/images/blue1.gif" width=100% height=1></font></td></tr></table></center>glad you noticed, did you click on any of them?

[DanS]

OK, but after reading the two Economist articles, I am confused. In one, they say that a CPM of $7.50 is an accepted rate versus other media. But in the other, it says that people are paying a $30 CPM for the top sites. It would seem that people are in fact still willing to pay an enormous premium for internet advertising versus other media.

[CapTVK]

<center><table width=80%><tr><td><font color=000080 face="Verdana" size=2><font size="1">quote:
<img src="/images/blue1.gif" width=100% height=1>
</font><font size=1>Originally posted by Ming on 03-11-2001 10:58 AM</font>
The story in the Economist, which Andrew Livings was nice enough to provide a link to, is a great article. It is a very acurate picture of what's happening in the industry right now. Even the Cost Per Thousand (cpm) figures provide are right on target to what we are paying for banner advertising.

<img src="/images/blue1.gif" width=100% height=1></font></td></tr></table></center>

Good to see the Economist is still getting the facts straight.

Eventually we'll see some working advertisement model but that could be a few years off. Which means that the situation will get worse before it gets better. In the meantime many websites owners will have to make some tough decisions: labor of love or labor for income?

P.S
Has anyone noticed that there is an apolyton.net but no apolyton.com?
Or that there's a sponsor window on the main forum screen?

<font size=1 face=Arial color=444444>[This message has been edited by CapTVK (edited March 11, 2001).]</font>

[Ming]

Yeah... the Economist is great. It's funny, I'm a "little" behind on my reading. I just read the story right before seeing the link to it here.

No one really knows right now what model will work for internet advertising. We are being really creative in our "buys", trying new things. The problem is, not much is really working based on true costs...

[MarkG]

DanS, i would first like to hear the definition of "top sites"...


anyway, want to hear examples of today's internet advertizing?

the following are "per click" or "affiliate" programs in which we participated and which closed during the last 6 weeks

- altavista.com *
- google.com **
- mycomputer.com
- bottomdollar (price search engine)
and today
- mp3.com

* (we kept the altavista translation box since it was usefull)
** (we actually werent fast enough to even participate in it )

<font size=1 face=Arial color=444444>[This message has been edited by MarkG (edited March 14, 2001).]</font>

[MikeH]

Wish I'd read that second Economist article before I started debating with Yin in here:
http://apolyton.net/forums/Forum23/HTML/020777.html?69

It's good to see that I'm reasonably close to agreeing with what the Economist article says.

[Ming]

Again, and good piece in the Economist.

DanS... The pricing discussed was solid information. Since all media is negotiated, there will be big swings in price. The bigger sites still charge more because of their ability to reach more of a mass audience.

And yes, the cpm's are expensive, and that's the problem. Originally, everybody assumed the "premium" was worth paying because it was more like direct mail then general advertising (direct mail cpm's are far higher)
But that hasn't turned out to be the case, and the pricing structure is going through many changes....

[yin26]

Mike,

My point was never that the ads are "good enough" to click. As that well-written article says, for this model to truly work across the net, ads need to be far more well-designed. For general circumstances, I agree, and one hopes Markos can pull a rabbit out of his hat in the meantime.

But the ad-content isn't really up to Markos. And what I'm saying is: Don't click the ad because you like the ad (though I like Chips and Bits), click the ad because you like Apolyton...and buy a game and REALLY help Apolyton.

So while I agree that the industry itself has a lot to learn, surely we can click and ad or two a week to help the "little guy" trying to bring us all this good info and a solid forum.