TYPE A GROUP NEWSLETTER #5
WHY IS ONLINE ADVERTISING SO STINKY?

Let's face it, there is plenty of lousy advertising in the world. There are TV and radio spots, billboards and print ads that make you want to stick a knife in your head.

But online advertising has taken awful to a new level.

According to the Interactive Advertising Bureau, 34% of Americans have installed ad blockers on their computers to avoid online advertising. The numbers in some European countries are even higher. And it is growing. Usage of ad blockers about doubled last year. In all, about 200 million people worldwide have installed ad blockers.

Doc Searls, a very smart guy from Harvard, calls it "the largest boycott in human history."

There are several reasons for the intolerance of online ads. They include "tracking" (a pleasanter word for surveillance); the way they slow our computers down and eat up our data (and, consequently, our money); and the lamentable annoyance of pop-ups, auto-starts, and interstitial pages. 

But one of the prime reasons for the aversion toward online ads is just simply how lousy they are.

As Doc points out, there are two primary lineages in the evolution of advertising .

First is what we call "brand", "product" or "Madison Avenue" type advertising. It's the stuff we see for Coke or Nike. It has a long horizon. 

The second lineage is "direct response." It's the stuff that wants us to "act now." We used to call it "junk mail." It's the stuff with 800 numbers, it's infomercials, it's "click here."

It is usually terrible and often exasperating. And it has taken control of the web.

The reason for this is pretty clear. The web has thus far proven to be surprisingly ineffective as a brand building advertising medium. So marketers are utilizing the kind of very cheap, very intrusive, and very annoying methodologies of direct response.

Second, most online advertising is so cheap that agencies will not hire talented (expensive) people to do it. Instead they give it to the type of people they would never let anywhere near a TV commercial.

The result is that most online advertising is lousy and annoying. And consumers are running for the exits.

Why are there so many ads on the web?
The stats on online advertising are instructive. First, there is so much supply online that it is extremely cheap. Second, it is generally accepted that online ads generate, at best, 8 clicks in 10,000 exposures. Think about this for a minute. If an advertiser wants to generate 800 clicks, she has to run one million ads!
How does online ad blocking compare to DVR ad skipping?
According to Nielsen, about 10% of TV viewing is "time shifted" i.e., watched at a later time on a DVR. When watching a DVR people skip ads about half the time. So, in all, about 5% of total TV spots are missed because of ad skipping.

  To view previous Newsletters: #1 , #2 , #3 , #4