Online Ads – Wave of the Future?

Published by • February 12th, 2008 RSS News Feed

Online ads are all the rage, with Microsoft, Google, and Yahoo all angling for dominance in the online marketing sphere. Everyone is touting online ads as the next big thing, but what people don’t realize is that online advertising doesn’t work, and when companies realize this, the inflow of money will peter out to a level well below what people are forecasting.

First and foremost, online ads are ineffective because, point blank, people are programmed to ignore and look past them. This is largely due to the active nature of web-browsing.

T.V vs. Internet

When people watch TV, they passively sit there as information is displayed across the screen. Watching TV is akin to saying “I’m going to sit down here, not think, and just absorb whatever is on the screen.” Internet browsing, however, is a much more involved activity, and one that puts the user in complete control. Instead of passively sitting on the couch, you’re actively browsing through a variety of websites, mouse in hand. Because of that, advertisements on the web are seen as a nuiscance, an intrusion of sorts. Rightly or wrongly, people have not accepted ads on the Internet in the way that they accept commercials on TV, and as a result, ads on the web are rarely absorbed and are mostly tuned out as people ignore them.
Confined Space

A problem with web advertising, as opposed to other mediums, is that ads on the web don’t exist within their own separate space. As opposed to Magazine or Television ads, online ads sit side by side next to the content, and because of that, there is only so much you can do with an online ad. Advertisers operate within such a confined space that the odds of producing a riveting and memorable ad is practically zero. Some websites have had moderate success with placing ads on digital media, such as being forced to watch 2-3 commercials on ABC.Com if you want to watch one of their Television shows online, but that example, not surprisingly, is related to TV. Watching 2-3 30 second commercials in exchange for watching LOST is something most consumers can agree to. On the other hand, ads emblazoned on web articles are lost in the shuffle and largely ignored because consumers feel they have a right to access web content for free with no hassle. Some companies have realized the futility of the banner ad and some websites have started showing full page ads before redirecting you to the article you were searching for – but there is always a button that says “Click here to skip this Ad” and undoubtedly the majority of websurfers click it. At best, a company might have some success with targeted ads, but even those are often ineffective as a marketing tool.

Does Volume overcome all?

Some successful websites generate over a million hits a day, and some argue that the general ineffectiveness of web ads is counteracted by the sheer volume of people who use the web. They claim that even if only .001% of users see and click on an ad, .001% of an insanely large viewing number becomes significant. This is a valid argument, but killing consumers on a volume basis has never proven to be an effective means of advertising. Another problem is the fact that up to 50% of ad click throughs are done by 6% of Internet surfers, otherwise known as serial clickers.

But aren’t companies and people making millions off of ads?

Yes, Google and co. are making millions off of online ads. But where is that money coming from? It’s coming from corporations who don’t necessarily understand the web and feel that any advertising is good advertising. I’ve been browsing the web for over 10 years and can’t remember more than 2 online advertisements that I’ve ever seen. In contrast, I could probably name 5 commercials that I’ve seen on TV in the last week.

Many companies are under the impression that online advertising is the next big thing. They assume that people will see their ads on blogs and popular websites, and in turn, their company will gain exposure leading to an increase in business and profitability. But online advertising doesn’t create exposure because the online medium is not conducive to advertising in any way, shape, or form.

Online Ads are like Casinos
Casinos make a ton of money because, in the end, the house always wins. That’s not to say that you can’t make money gambling, a lot of people do. But generally speaking, the average gambler is not going to come out on top. When it comes to online ads, Google and Microsoft are the Casinos. They’re gong to be making money and the Corporations are the gambling addicts who are spending hundreds of millions of dollars today, but will soon cure their addiction tomorrow when they see that the expected increase in brand awareness and profitiablity is non-existant or not even close to what they expected.

The Future of Online Advertising

Some say that because the internet is the future, that online advertising is the future. While that makes for a great tagline, companies will have to figure out how to do ads correctly before online advertising actually becomes effective. The advertising paradox, however, is that a good online ad is one that people don’t notice is there. So until someone figures out how to do online ads correctly, the underlying problem with internet advertising will continue to rear its ugly head — that being that the online medium simply doesn’t lend itself to creativity when full page ads are seen as nothing more than an intrusion. At the end of the day, people ignore ads, look past them, and forget that they were even there.

Itola Author

is a business / tax attorney from the windy city. Yoni is also a gadget enthusiast who enjoys writing in the third person.
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2 Comments »

Comment by Anonymous
2008-02-13 18:39:40

uh, a lot of this is fluff but non the less I was with you until here:
“Yes, Google and co. are making millions off of online ads. But where is that money coming from? It’s coming from corporations who don’t necessarily understand the web and feel that any advertising is good advertising.”

google is in a very special ad business and they dominate that market hands down because those ads DO WORK, the ads that rely on brand awareness, a constantly ever more lucrative segment is the ground in which things are yet unsettled.

If thats the point you were making then Yahoo or AOL would have been a better example in this case.

(Comments wont nest below this level)
 
2008-03-31 12:16:25

[...] Tech News’ article examines the difficulty of online advertising. With a far lower retention rate than television ads and a much higher ignorance rate, the article [...]

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