The State Of Online Advertising Revisited

Social Ads for the most part do not work, because the click-through rates are so abysmally low. But this concept outlined in the curated excerpts below could indeed be just the thing that would make advertising in social media something useful, as opposed to this.

It is very similar to my riff on the Super Tweet concept that was first raised by Scoble end of 2009, in response to Twitter announcing their initial advertising intentions. Which I have written upon previously, as well as the Advertising Failing On The Web issue in general.

The essence is the idea that by placing advertisements UNDER a contextual link you have to click to see them (along with other related content from the service in question, asf.), the act of clicking on that link puts the user in a completely different mindset than what typically happens during the more passive state of being interrupted during social media content consumption.

(And of course the effectiveness of the interruption decreases constantly, as users train themselves to just ignore the marketing messages as much as possible.) It is a more active, solution-focused mindset more in the vein of “classic” Web search.

AND it meets the other requirement I am always hammering home, that of contextual relevance: Offer people MORE of what they were already doing. Don’t try to offer them something random that has nothing to do with the context.

The “More like this” link could provide the necessary contextual glue! Twitter would be wise to shift their efforts in this direction as well, rather than trying to do this [instream ads, which users will train themselves to ignore in short order, like they have with every other form of unwanted display ad…] and be certain to reap mostly scorn and probably failure:

[post still needs to be transfered over from the now closed Amplify: ]

Clipped from – The Future Of Facebook Search:

Facebook continues to test and improve their own search results. Yet, are we too focused on how Facebook is tackling traditional search? What if Facebook added a simple More Like This link to certain news feed items?

Clicking on the More Like This link would return a news feed with related content. In this instance, it would return Open Graph pages related to Samsung and HDTVs.

… Implementing a More Like This feature relies on a number of assumptions. The largest of these assumptions is whether Facebook can identify the content of a news feed item. My example might be difficult because it’s a simple status update without a link that has Open Graph data already attached to it.

Why is this interesting? I believe a More Like This feature would change or move user intent. Search has traditionally been about intent harvesting. Users come to Google with an intent. (“I want to find a creme brulee recipe.”) At that point it’s a bit like shooting fish-in-a-barrel.

Why did I want to find that creme brulee recipe? What created that intent?

… A More Like This feature creates an interaction – an activity. The user is raising their hand and requesting more information about that content or topic. It might not be a traditional search – it may not translate into intent harvesting – but it’s certainly much further down the spectrum.

UPDATE: Riffing on “A Million (free) Angry Birds Downloads Exposes Critical Android Platform Fail”, which says “There is no possibility that an ad-laden video game is better than one without ads.”

Actually, there may be ways to make it very acceptable & lucrative for the App designer at the same time. The key is as with every other form of advertising online: Offer/sell people things that make sense in the context of what they were already doing!

You just have to step away from the “ad network” model, that will never work well because the offers will be way too random. But why is it that people playing Farmville on Facebook are paying real money to buy VIRTUAL tractors? Because the offer makes sense in the context of what they were already doing…

Anyway, Angry Bird’s makers could upsell the users from free to a premium version of the game. They could build in premium implements somehow a la Farmville. If you make each offer cheap enough to be an impulse purchase, people WILL buy. That’s why they put another quarter into the pinball machine or similar.

You can sell them Angry Birds “swag” trinkets (T-shirts, cups, posters, etc.) at Impulse Purchase prices. Etc. etc.

This SiliconAlleyInsider Sub Headline Reveals Why You Must Move The Freeline

Stop Whining About How Elitist And Expensive TED Is [Just Because] You Didn’t Get Invited
Feb. 15, 2010, 9:17 AM

>> Too bad you missed it! Larry Page gave everyone a free Nexus One.


via Silicon Alley Insider.

(Minor edit for colorful language.)

What is amazing about this (the subhead sentence after the headline), is not what it says about TED, but what it says about the future of content creation, and the question of charging for it.

Yes, Larry Page is a multi-billionaire who gave away free Nexus Ones created by his Fortune 500 (currently ranked #150) company, Google, to other well-to-do folks who were able to afford to pay $6,000 for the exclusive TED Talks experience. In doing so, he is following word of mouth (WOM) marketing model 101, of getting your product into the hands of key influencers, and hopefully winning them over, and getting them to evangelize your product.

But aside from all of that, he is showing what the future really holds: With ever cheaper reading & communication devices such as the Nexus One, it will become increasingly common to give those away to users, JUST to have SOME influence over what content (and thereby advertisements) they consume.

In essence, such a give-away represents A PAYMENT of the consumer for consuming content on the “gifters” platform. That is how important it is to get some, any slice of the attention pie. The getting of some of which implies that you will have opportunities down the road to do business with the “giftee” in the form of offers (ads or otherwise) that can be embedded with the content.

Note that it is taking for granted that a lot of content itself cannot be charged for. Why? …

Continue reading “This SiliconAlleyInsider Sub Headline Reveals Why You Must Move The Freeline”

Online Ads = Punishment For Using Stuff For Free?!

Silicon Alley Insider in Wednesday’s post "How Google Can Make Money With Google Wave" is bringing up a point about online advertisement very much like the kind I have been making for at least the last 6 months. Here the key excerpt (my BOLD highlights):

Semantic advertising. […] Since conversations on [Google Wave] waves have to go through the server each time, a semantic engine could parse them on the fly and serve up relevant text ads. With enough data and training, a semantic engine could decipher intent, i.e. whether you’re talking about your trip […] last summer, in which case ads would be useless, or whether you’re setting up a wave to plan a trip […] with your friends, in which case ads for cheap flights and hotels are relevant.

Intent is the reason why nobody clicks on ads in social networks but they do in search engines. A semantic engine would know that 99% of the times you’re waving an ad would be irrelevant at best. So 99% of the time people wouldn’t see ads at all. Wave, Inc. might set this up on their own servers and allow others to set it up on theirs under a rev[enue]-share agreement.

Over the long term, Wave, Inc might also open an ad network […]. This would be good for consumers since they would get few ads, and only relevant ones, good for advertisers since they’d get high clickthrough, and good for Wave, Inc, since they’d have a high quality, expensive inventory. This might be the thing that makes online ads something other than punishment for using stuff for free, but actually something useful and exciting.

Problem: semantic technology is still inchoate and execution would have to be flawless for people not to find it annoying and/or creepy.

Read that 2nd to last sentence in bold again. Therein lies the crux of the failure of online advertisement in most areas other than search ads.

For more proof of how badly current ad models are failing, witness the stats that MediaPost Publications just posted in ComScore: Most Clicks Come From ‘Natural Born Clickers’ 10/02/2009:

Indeed, the number of people who click on display ads in a month has fallen, from 32% of Web users in July 2007 to only 16% in March 2009. Worse still, an even smaller core of consumers — representing just 8% of the Internet user base — accounts for the vast majority, or 85%, of all clicks.

Now while the strong "few users generate most clicks" imbalance is predicted by the 80/20 Principle, the reduction BY HALF in less than two years is indeed stunning, and cannot likely  be explained away with the recessionary economic background alone.

It is far more likely that users have systematically trained themselves to mistrust and hence to simply ignore online ads altogether (other than MAYBE search ads).

The situation of internet users ignoring internet ads is apparently becoming so dire, that comScore et al. are beginning to sound like TV advertising execs in their pitch to ignore the bad news (from the same post):

"Marketers who attempt to optimize their advertising campaigns solely around the click are assigning no value to the 84 percent of Internet users who don’t click on an ad," said Linda Anderson, comScore VP of marketing solutions and author of the "Natural Born Clickers" study. "That’s precisely the wrong thing to do."

Rather, as comScore research has shown, marketers need to embrace the fact that non-clicked ads can also have a significant impact on consumers.

Basically, the argument goes: Ignore the fact that no one is clicking your ads anymore, those ads are still somehow reaching consumers on a subconscious level, and will (magically) continue to build your brand (and ultimately sell your stuff) that way.

When the Internet guys are telling you to forget "measurable" and instead extol the virtues of Madison Avenue-style image advertising, you know something is afoot.

Now it is fair to point out that people do in fact retain contents that they saw even if the "seeing" never reached the level of top level consciousness. As such, in a recession, one might argue that there could be value in a company advertising simply to "ping" the consumer in a "we’re still here" sense? (Especially if the collapsing ad rates make it cheaper than ever to do so…)

But now remember the phrase from the first quote: "…the thing that makes online ads something other than punishment for using stuff for free". Then think about how sure anyone could be that their mere ad presence actually engenders much love from anyone at this point.

Rather than ask themselves the hard question on how to finally make online ads work, online ad stake-holders give you evasive platitudes. That’s simply not enough.