In the era of engagement, how is online advertising faring? And why are clickthrough rates on social media sites so abysmal?
And is the ad-driven business model – the economic engine that was supposed to power the “everything is free” Internet – destined to underperform?
It doesn’t look good (at least according to Eric Clemons at TechCrunch):
Why Advertising Is Failing On The Internet
The expected drop in internet advertising revenues this year was neither unpredictable nor unpredicted, nor was it caused solely by the general recession and the decline in retail sales. Internet advertising will rapidly lose its value and its impact, for reasons that can easily be understood.Traditional advertising simply cannot be carried over to the internet, replacing full-page ads on the back of The New York Times or 30-second spots on the Super Bowl broadcast with pop-ups, banners, click-throughs on side bars. This might be a subject where considerable disagreement is possible, if indeed, pushed ads were still working in traditional media. Mostly they have failed.
What gives? Why is all the nifty social media advertising falling short?
This Isn’t Newspaper or Television
The rub is this: feeding advertising to a television or magazine viewer is an attempt to “interrupt” a passive viewer – one who enjoys little control over their experience beyond the binary (watch, or stop watching).
By contrast, online users have a great deal of control over their experience, and they’re typically actively engaged with getting what they want.
A comparison? Imagine a shopper idly browsing a store. Now compare that shopper to one intent on locating a specific item; the latter is more engaged with the search, and less likely to be distracted.
Engaged readers – not passive consumers – are the explanation for the dismal clickthrough rates on most social media sites.
Social media users aren’t a passive consumers of information, but participants in a community. Unlike non-interactive media, they’re intent on not only receiving information, but acting on it.
And unlike yesterday’s passive information consumer, they also demand to be heard.
If you don’t believe me, try this experiment: Create a blog filled with controversial posts, and then limit the responses to an arbitrary 100 character length.
Stay engaged, Tom Chandler.
“The rub is this: feeding advertising to a television or magazine viewer is an attempt to “interrupt” a passive viewer – one who enjoys little control over their experience beyond the binary (watch, or stop watching).
By contrast, online users have a great deal of control over their experience, and they’re typically actively engaged with getting what they want. ”
I think you’ve got it exactly right with those comments. A crucial aspect of that active engagement is the creation of user-generated content, such as review sites.
A review site provides information that is far more helpful than the information in an ad. After all, an ad exists to persuade me, and all other motivations are subordinated to that one.
I also wrote a piece about this topic here:
http://www.whyweworry.com/blog/2009/06/29/why-advertising-will-fail-on-the-internet/
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Thanks for the link to your article. I largely agree, though I also believe that online advertising is failing because it’s such an awful, limited format.
It’s hard to deliver much in the way of information in a 160x 600 pixel ad, yet more intrusive methods aren’t proving successful.
That’s one reason why I believe more engaging media channels may prove critical – the old model is in trouble, in part because of the simple realties of screen space.
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