Is web the right place to stick your ads?
Matthew Creamer in his article in Advertising Age questions the viability of Internet as a great medium for advertising.
Here's the issue: The Internet is too often viewed as inventory, as a place where brands pay for the privilege of being adjacent to content, like prime-time TV and glossy magazines relics of the pre-blog days when getting into the media game actually required infrastructure and distribution.
He raises concerns around monetizability of social networks
There are already tons of reasons to be skeptical about hopes for mingling the intense sociality of the web with an interloper like an advertisement. In its fourth-quarter results, Google noted the difficulty MySpace, with whom it has an ad arrangement, has in monetizing its immense traffic. Before that, Facebook, the fast-growing No. 2 player, lost momentum when its plan to turn user recommendations of products and services into ad inventory ran smack into a wall of privacy complaints. While users might be eager to talk about brands and products, as Facebook has maintained, they don't necessarily want to do so with some drooling corporation looking over their shoulders and broadcasting their recommendations to the world in sponsored boxes. The difficulty begs several important questions, among them whether all this is just an attempt to make money off the unmonetizable?
He then raises concerns about display ads
Submits that search-engine and classified advertising work because people who come in contact with those ad forms generally are looking to buy something, which is why they searched in the first place. The same isn't true of display ads, which Mr. Nielsen concludes "aren't very well-suited for the web" and are holdovers from a way of thinking best applicable to other, older media.
Matthew raises several good points. Advertising on social networks has not been very successful. Display ads can get annoying if not done right. But while the observations are right, I don't agree with the inference. The question is not what whether internet is the right medium for advertising, but it is about what are the right and engaging formats for ads.
Lets look at some numbers. [Source: eMarketer]
There is an interesting trend line in the numbers above. Search and Display the current dominant formats have a healthy growth rate but it tapers off slightly. Rich Media/Video ads is a rapidly growing format. This is due to the increased media consumption on the net by users.
Advertisers will go where the users are. The most effective form of advertising will change based on where user's attention is.
I remember the dot com bubble burst of 2000. There were lots of articles that predicted the death of online advertising. But look at what happened in that period, Google came and reinvented the field with data driven advertising. The annoying pop-up ads died and we got extremely well targeted search and context ads.
So as long as people shift their attention from TV to the net, from movies to the web enabled phones, the future of online advertising is safe.
