HarveyJ

Before you chime in, read the article, and not just the title.
He mentions specifics sorts of advertising, and excludes others... Mostly websites and social media style work are, by inference, the advertising platforms that won't fail.
And he's not talking short term either. Considering his use of old terms like "meatspace", this guy's in it for the long term.

Why Advertising Is Failing On The Internet

Thoughts?

I think this guy's right in some ways.
CPM and CPC revenues are falling drastically. Everything is moving to CPS / CPA if the marketing department at the company has any clue as to what they're doing.

However, there are traditional ads that aren't going to fail. They'll just adapt.
TV ads will become micro-films. 30 second stories, or visual gags. You've seen plenty of ads like this already, and you remember the ad if not the product. Volkswagon zombies anyone? Video advertising will basically end up being more about something visually impressive, bizarre, or product placed. And all of this shit will end up on YouTube, which Google has cleverly already sunk teeth into.

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AdHustler

interesting article but he goes on and on. Seems more like the intellectual type then the practical type. Although some advertising models online will change, there will always be a place for virtually all advertising models which is the beauty of the internet.

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smoosh

Ok... Frankly, this dude is just anti-internet. I haven't done the stats but I presume if you compare recession ad budget drop rates of online vs traditional, online's is going to be waaaaaaay less. Despite the fact that people "do not want, need, (or whatever else he said)" the ads, they will still get them AND they will still interract with them. Unlike traditional, online offers advertisers ways to evaluate effectiveness of their ads, and I do not mean just a vague increase in sales, but specifically... all the way down to keyword/creative/etc. He also concentrates on shitty display targeting and pops, makes his argument completely stupid as those are on average the cheapest and least effective. One exmaple... Google! run a search for a product/service and you are most likely to click on an ad... How is THAT going to die?!

I also do not believe that CPMs and CPCs will die. Even if the majority of the market (and I am not mentioning specifically recession times) moves to CPA/CPS there still will be media buyers who think they can convert someone better than other people. There will always be plenty of peeps trying to buy on one model and monetize on another. Why? Cause they are just fuckin good at it! There is a certain "disagreement" between publishers and advertisers - advertisers would prefer CPA/CPS as it guarantees a margin while large pubs would prefer CPMs as it guarantees revenue. (I am talking general terms here...) There will always be a place for someone buying the traff one way and selling it on a diff model. DA INTERWEBZIES RULES!

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Drake

This dudes a moron.

This was the kind of thinking that used to drive me nuts in university. Some dipshit that thinks they have it all figured out. Everything is black and white. And most companies are evil. He thinks his school and Professor title allows him to say anything.

Look again at the article:
Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania

He aint even in the damn Marketing department! He should go over there and they rip him a new one if he spews this stuff.

He says you cant replicate back cover magazine ads or SuperBowl attention online.... Who the hell would want to even try? Most magazine spending is a waste of money and the SuperBowl typically loses money for 85% of the companies that do it. Only a few ads that day really catch on and attract attention. After millions of dollars in fees to ad agencies, producers and the network itself.

What would a few million buy on the internet? And you could track almost all of it. And spread it out so your server stays up and fulfillment can fulfill it.

gopher

CPM isn't going anywhere, how else would you compare performance. Yes, some places are offering CPA billing, but it all backs out to an effective CPM in the end. And the article is retarded.

Nikko

Advertising is not dead by any means, but just like during the last Great Depression, it will be undergoing some seismic shifts.

The number of advertisers will drop because the natural inclination of an ailing business is to 'trim the fat', which ususally means the marketing budget. The number of customers for non-essentials drops because people are saving not spending.

That means you will have a rising glut of cheap advertising space across a variety of platforms available, and a bunch of customers who are thinking differently about how and what they buy. Smart marketers will be making a fat buck off the shortest path between the two.

True creativity, both in terms of ad content and reach strategy, will rule the day.

CPM and CPC dead? Not if that's the only way Google can get you to take out an ad with them. No marketing money means cheaper advertising space for everybody, it's supply and demand.

The author is a moron. He should try being the one who has P&L responsibility for a crappy product line in a down economy with a marketing budget of exactly zero and a corporate culture of 'lucky you have a job, so shut up'. I made net $4 mil that year for that stupid company, and I would have taken a jackass like that out in the parking lot and given hima a hard Melvin.

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ImagesAndWords

Reading through the article, the guy seemed to lose more credibility the more I read. To the point where I smell the failboat pulling in to harbor.

He claims;
O'RLY? That must be why companies for centuries have poured billions of dollars of their budgets into advertising. Because it doesn't work.

Right. That's why they don't click on any ads. Ever. And nobody ever gets anything to convert off of these ads. They're clearly there just as filler and nobody wants them, clicks on them, or would buy anything through them. I think it's a fad.

They may not "need" it. But the fact is that advertising is part of our lives. In fact, people's lives would be different without advertising. New products and services would be left in obscurity. Technical advances in consumer products would only be known to geeks buried in some forum somewhere. Constant advancements and improvements in the things that better our lives (due to competition and creativity) wouldn't prosper by far the way it has the past century if it wasn't for advertising.

And this guy is talking about the internet of all places(!)

The place where ads can be presented to specific viewers or readers on a particular niche. Where ads can be tailored on the fly to present actually interested buyers with the product they most likely will want to buy (and for the best value).

The internet. Where people can specifically search for where and from who they want to buy stuff.

Sounds like the guy is stuck in 1997 when you'd see all kinds of random banners on arbitraty websites. 468x60 banner ads for teddy bears on a hot rod forum. Ads for collectible Rambo knives on a knitting website. But the net has evolved with better targeting and tracking these days. Spewing out unrelated ads on unrelated sites benefits nobody.

Yep... internet ads will soon be history.

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conv3rsion

he's an idiot. that article is full of fail.

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Andrew

The more advertising revenues fall for publishers, the more its value rises for advertisers.

People need and want to buy goods and services. Most companies are willing to pay money to get to the front of that attention line. As ImageandWords pointed out, the author's points are completely wrong.

Advertising might fail as a publisher business model, but that is only because so many companies thought it was a good business model. Old CPM revenue models made a lot of publishers think all they needed to do was jack up their pageviews to mint money. Good or bad economy those predictions were unachievable. Now we have a bad economy and it hurts even worse.

aim

Really? I'm going on a Cruise in April. The paid listings when doing initial research were FAR more relevant and helpful than the organic listings were when I was booking my trip.

This guy is absolutely a fucking moron. Users aren't searching for a "Web location" - has this guy really even used the internet? Google has spent millions in R&D and testing and (much to the dismay and headache of affiliate marketers) makes damn sure their paid search listings are extremely relevant to the search query.

This guy is just another out-of-touch loser socialist (they seem to popping up all over these days) with an propagandist agenda.

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trigatch4

The entire article is idiotic. In general, across all mediums, advertising is naturally undesirable. However, targeted advertising that provides useful resources/content/ideas/products/services to consumers CAN be helpful.

Is this a small percentage? Of course... otherwise there would be no need for content and every site would be a freaking banner mall like we saw frequently in 1998.

There will always be crappy platforms/mediums/sources on which advertising is garbage. There will always be crappy/spammy advertising that makes it's way onto legitimate places. At some point consumers have to decide for themselves what mediums are reputable and which are not, and likewise, which advertisers and advertisements are reputable and which are not.

I don't think it is asking for too much that consumers use their brain every now and then. The author's sweeping generalizations only aim to defend the helpless, lazy consumer who makes poor decisions not only when it comes to advertising but probably in regards to the rest of their life as well. Consumers should know to educate themselves and those who don't usually deserve what they get - lets call it Consumer Darwinism.

Or how about this. Why don't I write an article on how the restaurant industry is going down the drain because there are a lot of Chinese Restaurants calling themselves "#1 Kitchen" and I've eaten at two of them and both of them aren't #1 so therefore the consumer is being lied to and restaurants are a farce.

Makes no sense? Exactly. Neither does this article.

I don't care that it breaks advertising into CPM, CPC, CPA, yada yada. Different advertising has different purposes. How do you think everyone in the world has come to call "tissues" simply "Kleenex"? Branding... something to which CPM advertising is closely tied. But I suppose that has no value either.

Let me directly refute a quote that kind of sums up the article:

Tell that to Amazon affiliates who are making a crap load of money NOT by promoting the products they're directly selling... but by those people clicking what Amazon dubs "related products" that seem anything but related. We don't always know exactly what we're looking for... sometimes we need to be directed, reminded, enlightened, informed and good advertising can do just that, regardless of what form it takes or where it appears.

Apparently, Jesus is the only consumer that the author knows. Give me a break... I'm done with this malarky.

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affiliatearmy

I love when tenured professors believe their own shit due to inflated ego and ride it all the way into the ground, right past all the warning signs. I had a few professors like this in business college too...most of us just laughed at them behind their backs, and did our work to get the GPA and move on. Techcrunch is obviously hurting for content....I can just see the editor listening to this spewage and trying to hold back his own laughter.

amanda11

Someone put a penis in this guy's mouth -- cuz he's just talking out of his ass. We all know his poor ass isn't making money on the Internet.

mstef

Does this not exactly pertain to all forms of advertising on any medium at all? (minus the "on the net" part)

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Sticks79

To sum up this whole thing: this stupid fuck has no idea what targeting is & he needs to shut the fuck up.

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thunderlips

just an old dog that cant learn new tricks... i wonder if he did the interview my telegraph

Aplchian

didnt read the article.. but judging from the title.. RETARDED

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zombiezoo

i lolled

SuperMetroid

That article is a load of crap. Not only does the guy have no idea what he's talking about, but he's completely bias. Advertising on the internet is failing? Yeah right. The internet runs on ads.. not to mention that TechCrunch (the site hosting this guy's shitty article in the first place) pays their bills with ads. He claims mobile ads will fail, ads aren't targeted, no one trusts ads, the sky is falling, yadda, yadda... Everything this schmuck claims to be true is in diametrical opposition to reality.