The future of online advertising

Kevin Drum asks:

Are magazines generating — or on track to generate — more online revenue than I think? Are there hybrid models out there that I’m unaware of? Or is the future of online versions of existing print journalism as bleak as it looks? Comments?

I take the optimist’s approach. I think online advertising has to catch up to print advertising. Once the ads get better and more targeted, and they find better ways to integrate them – and once the online audience gets bigger – I think you’ll start to see more revenue generation. I also think companies like Google have a huge incentive to keep interesting content on the web, including actual news. So I suspect we’ll see Google and other ad companies finding ways to improve ads and the revenue they generate for publishers. Symbiosis is key.

Also, I think you’ll see a lot more revenue generated through devices like the iPad and other readers.

Bottom line: I think we’re still in the early days of the internet and there’s a lot of smart, innovative people out there who will find ways to make money. There’s also a demand for news, so I can’t see how that’s going to just disappear. Honestly, I have no way of predicting how news and online news and magazines are going to look in a few years, but I don’t think they’re going anywhere.

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2 thoughts on “The future of online advertising

  1. I recommend the book _It’s Not News, It’s Fark: How Mass Media Tries to Pass Off Crap As News_ for the last chapter when they talk about the various models for bringing in money.

    I’ll try to paraphrase…

    Newspapers benefited from a lot of low information (including their own low information).

    Bob’s Furniture is having a sale or wants more people to come in and buy a bookshelf or whatever. So they buy an 8th of a page. People come in but not in the numbers Bob really wanted… so the answer is to buy a quarter page. Or, you know, we have great rates on a full page ad on the back of section A, with color…

    And there wasn’t really a good way to measure why people came in. Was it the ad? Was it the radio ad instead? Was it that they just ran out of shelf space? No real way to measure anything. Everybody had low information.

    In the days of the intertubes, however… everybody has absolute and full information. You know *EXACTLY* how many eyeballs see the ad on the side of the webpage. Additionally, you know *EXACTLY* how many people click on the ad. On top of *THAT*, you know *EXACTLY* how many people go on to buy the product after clicking the ad… and what Fark found out was that it was damn few who did any of that. Additionally, they found out that people had opinions of particular ads (here’s a flashback for you: remember the “punch the monkey” banner ads? People *HATED* those) and made their opinions clear.

    In the days of newspapers, if you hated the little cartoon character in the upper left hand of the newspaper ad, well… who cares? It’s not like you’re going to whip out the typewriter, type up a letter, buy a stamp, and mail it off. In the days of the tubes, however… you just might send off an email. Hell, don’t just send it to Bob, send it to the webpage! Send it to your friends. Start a thread in the discussion boards of how obnoxious Bob’s cartoon character is. Maybe someone else will post some “fan art” of the character doing something that ought not be discussed on a family webpage.

    A lot of information. In the case of sales, you have *EXACT* information. And it’s one thing to say that you have millions of eyeballs look at your site a week… but if not even one percent of one percent of them are willing to click (let alone buy) your product, what can you do? Say “well, you need a bigger banner ad”?

    When advertising operates in a low information environment, it tends to “work”.

    In a high information environment?

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