[This column lets experts in the information technology industry discuss the challenges and trends their businesses are facing in their special niche of the marketplace.--Ed.]
In 1988, perennial presidential candidate Pat Paulsen was asked by the Seattle Post-Intelligencer for his view on wildfires and the environment. He said, "I think the major cause of forest fires is trees."
Paulsen may have stolen that line from an old Smothers Brothers comedy skit, but I am reminded of it whenever I hear media industry analysts talk about the disappointing performance of internet advertising and how only a small percentage of print advertising has migrated to online.
I think the major cause of poor-performing internet advertising is that most internet ads are poor.
An October 2009 study from comScore and Starcom reports that the number of web visitors who click on internet display ads has dropped 50% in the past 2 years.
Another study done last year by MORI Research found that 20% of 14-32-year-olds surveyed trust print advertising, while only 6% trust online advertising. A similar Hearst study of 18-54-year-olds found that 21% read print ads, yet only 7% pay attention to online ads.
One of the most alarming (and scientific) studies conducted in April 2009 by McPheters & Co. and Conde Nast found that 63% of internet banner ads were not seen by web users. Eye-tracking software determined that users' eyes skipped over 37% of the internet ads and stopped on less than one-third of the ads. When these test results were weighed against other "probability of exposure" factors, the researchers concluded that a full-page color magazine ad had 83% of the value of a 30-second television commercial, while a typical internet banner ad had only 16% of the value.
How is a media company supposed to grow online ad revenues when nobody seems to like, trust, or pay attention to online advertising? Here are a few of the worst practices responsible for the ineffectiveness of most internet display advertising today.
Relying on click-throughs for internet ad rating and metrics--If internet ads are priced and measured based on the number of people who click on them (i.e., click-through rates or CTRs), then ad designers will be encouraged to create more intrusive, irritating, and infuriating ads. Everybody on the planet hates banner ads that scud across the screen without warning, where the "X" button is hidden or so small that you can't help but click instead of close. Clicking on these ads in no way equates to the user's interest in the products or services being sold.
According to the recent comScore study, only 8% of today's internet users account for 85% of all clicks. Half of these clicks come from young adults in lower-income brackets. Therefore, placing value on CTRs not only encourages increasingly obnoxious ad designs, but it also shifts the focus away from the majority of online audience members, most notably those that many advertisers and marketers want to reach.
Relying on keywords alone to deliver contextual advertising--Just because I'm reading a story about airplanes does not necessarily mean that I am planning a holiday vacation. Worse yet, if I am reading an article about a car crash, do not assume that I am in the market for auto insurance.
There are many sites dedicated to chronicling bad or inappropriate linkages between online news or editorial content and the display ads
appearing "in context" on the same page. For example, see the figure at the bottom of the page from badcontextualads.com, where an ad for an online meat retailer appears on a web page for PETA (People for the Ethical Treatment of Animals).
Thousands of other, often more horrible examples abound online, such as the display ad for a grilling competition appearing above an article about a couple who attempted to dispose of a corpse by barbecuing it. …