Full disclosure – my new company, Nearness Function, is a new advertising network so I am diving deeply into the digital advertising industry and am thus not at all an unbiased observer
As I have been working on launching Nearness Function I have been paying very close attention to various types of advertising – both on the web, in mobile applications, in some desktop applications and advertising everywhere else. Lately I have seen a couple of understandable but, I think, highly unproductive trends in ads online. These trends being examples of some of the many reasons online advertising is not living up to all of the hype and potential.
A bit of background as I understand the industry today – and as I noted above, I’m working to change this. At present roughly speaking the US total advertising spending per year is about $300B, of that about $22B or so is spent online, the rest is spent across a range of media (TV, Radio, newspapers, magazines, outdoor advertising). I am not 100% certain if yellow page ads and direct mail are also included in those figures and there is also some portion of ads which are in new/experimental forms (elevator screens, private tv networks in airports, “guerrilla” marketing in the streets, sponsorships etc). I also don’t know how/if some forms of sponsorships are included in that $300B figure (Nascar, “naming rights” to stadiums etc).
Online the majority of the current spending is “direct response” advertising – i.e. ads intended primarily to drive a specific action (often a “click”) – most famously (and successfully) being search advertising which is dominated by Google. There is also a large business of “lead generation” (again, I don’t know what portion of that industry is included in the oft cited figures of online advertising). Lead generation is also a term tossed around by many firms but with slightly different spins – but in general as I understand it the business is essentially adding a layer of pre-qualification and data capturing to drive highly targeted traffic and potential clients to a firm. The lead generation firms , in turn, often buy a lot of online (mostly direct response) advertising which then directs the people who click to take a series of steps to qualify them as possible leads for the clients of the lead generation firm.
The question for the stats being what portion of the spending by the firms who are clients of the lead generation companies “counts” as advertising spending (vs. some other category of spending). Clearly in turn the lead generation firms spend a lot of money in online advertising (but we should also be cautious not to double count spending).
But leaving questions of the exact size of the current (US) online advertising market aside for the moment I have issues with the mechanics of advertising online today. I should also note that I also believe, very strongly, that focusing just on the “US” market is foolish – the Internet is already no longer majority US users and over time this will only increase. Many of the publishers (of online software/web 2.0 applications) with whom we have been speaking report as much as 60% or more of their users are outside of the US. And there are many sites and applications with millions of active users the vast majority of whom are not from the US (cyworld in Korea is a huge example, Google’s own Orcut being another of many).
I think there are many problems with online advertising today – one large reason I have decided to co-found a new ad network is to address some of these many issues (which I think are also opportunities in many cases). In this post I now want to highlight two related issues I have with a lot of online advertising.
First, too many online ads, especially various forms of banners/graphic ads, break with how the rest of the web functions
Second, with only a few exceptions, online advertising is not patient enough or respectful of the possible interest & needs of actual users
To expand on my first point.
If you look across the web you will find that an increasingly large number of ads being served up on various websites are taking the form of a flash banner (or often square) display ad. However frequently the ad itself is not actually interactive or a flash application. As a result if you do happen to want to interact with or click on the ad you don’t know what will happen – will it be an interaction in the same page i.e. a flash application? Will it open to a page in the same window? Will it open in a new tab/window? You can’t (and I think this is usually very deliberately the case) even see what the URL for the new page will be – you just have to click and be taken there.
Now from an ad network perspective I understand why this is a desired behavior. If you get paid only on “clicks” you want to direct all those clicks through your systems so you can count them uniquely – know which creative (i.e. specific ad graphic & text) drove that traffic. From a business perspective this then drives who you as the ad network have to pay. You may also be doing some redirection – so a person clicks, is sent one place then redirected to the destination (a “landing page”).
But from the end user perspective this opacity is not what we have come to expect from the web. I have often had my attention caught by an offer, by something in an ad, and actually wanted to learn more about that company – but almost never do I want to do that in the same tab as whatever site I happen to be in – rather I want to open up that new page as a new tab.
A brief sidebar about how I use my browser of choice, Firefox, which might explain why I would want to do this. I typically have a handful of core websites open as different tabs at all times. Two different tabs for email (my personal/general email and my Nearness Function specific email), a tab for Facebook, a tab for Twitter, a tab for my task management tool of choice Remember the Milk, often a tab for the stats of my blog (or as is now the case for writing a post there) and then usually a few other tabs related whatever I am currently working on. I’ll often open up a tab for my calendar (Google calendar) or to research events (upcoming.org usually) etc.
If, for example, an ad on Facebook catches my attention, I don’t want to replace my facebook tab with whatever that ad points to – rather I want to open up that advertiser’s site in a new window and then follow up with it as my leisure. Likely taking a quick glance at it when I first open it up, but I might then refocus on email & other tasks and only take a longer look many hours later when I have more time.
In this specific case, most of the ads on Facebook (graphic ads) do in fact open up in new windows (however some of the ads on/around Facebook go to other parts of Facebook or stay in the same tab/window). But since until after I click I have no way of telling this (a right click only brings up the flash controls) I actually don’t usually click on graphics ads.
And from a UI perspective the flash and graphics nature of many current ads leads me to wonder if a click inside of the ad will open up a new page OR if it will take the form of some form of interaction within that banner (many, many flash ads on the web imply via their animations that there are some forms of interaction which can occur inside of the ad unit – i.e. the infamous “whack a mole” type ad banner games etc.)
When the user is not certain what will happen when he or she takes an action, it is much, much less likely any action other than ignoring will take place at all.
Which leads me to my second pet peeve and issue.
Literally every day online some ad banner will, in fact, catch my attention – at least for a moment. I’ll take a quick note of it and think “hmm that might be useful/interesting/worth checking out” (especially since I am interested in the mechanics of advertising campaigns not just in products or services which I might be interested in specifically.).
However for the vast, vast majority of websites if I don’t interact with and click on that ad immediately – if for example I instead continue on with my regular interaction with that site (finishing reading an article, send a message to a friend on Facebook, write a comment to a blog post, etc) when I’m done with that interaction almost always the ad has been swapped out for another, very different ad and there is no way for me as a user to go back to and see the ad which had caught my attention.
In other words, I am an interested, live, very real possible customer who wants more information but I don’t have any way to get it if I didn’t drop whatever else I was doing and immediately interact with that ad (and as I noted above usually these days in a way which will lead to results which I can’t predict – I may get a new tab, or I may not). Since I couldn’t easily right click and open up the destination in a new tab (i.e. know I could then continue on my way and check out the company at my leisure) I almost always just don’t click at all.
Furthermore, in the majority of websites today I don’t have any way to indicate “go back and show me the ad you just had in front of me”. In fact if I use the back button on my browser I may get the ad via a cache (or I may not) and depending on what I was otherwise doing on the site I may get a bunch of other, unwanted interactions (I might, for example, have been in the middle of filling out a form – say leaving a comment somewhere). So going “back” may not be what I want to do.
Taking a longer term view of things the seemingly random mix of ads (technically usually “run of network/site” ads) which get shown on a majority of websites today means that as a user I see very little resonance between brands and the site or application which I am using. Even on sites such as Salon.com who usually have a given sponsor for a given day since these change so frequently (and can then be seemingly random with how they choose to show/not show ads for that day’s “site pass” sponsor) as the user I don’t end up getting a strong brand impression. I don’t usually transfer the respect and admiration I have for the given site (Salon.com for example) to the brand(s) which are supporting that resource I value.
In contrast, advertising offline is far, far more patient and much better, I’d argue, about building up longer term associations and relationships. Not in all cases to be sure, but on TV for example the same brand(s) will usually be seen supporting the same show over at least most of the same season. However the mixture of national ads (which are usually consistent for a given season) and local ads (which are much less constant) does diminish this effect today. Similarly on radio the same sponsors typically sponsor the same timeslots over relatively long periods of time.
Print publications frequently see repeat advertisers across even entire years of publication – the New Yorker to which I have subscribed for many, many years has some advertisers who are in every single issue. Some who almost always buy a full page ad (or multiple pages) and others who are buying just a small piece of a single column. But because they buy these ads on an ongoing, repeated basis, as a regular subscriber I recognize them and have a generally positive impression of them (after all they have been supporting one of my favorite publications for many, many years).
And though I might not be in the market for say a French Beret today, when/if I were I would probably turn first to the pages of the New Yorker and find the ad for that specialty firm who has been advertising there years.
Brands are very powerful and important – I’d argue in today’s global and deeply competitive market even more so now than in the past. However I don’t see companies online buying, delivering and deploying advertising in ways that truly help build and maintain brands over time. All to often campaigns are very short lived, very diffuse and disconnected from the site and applications they are embedded in and around, and in the quest for massive numbers of impressions (so showing a new ad everytime the user loads a new page – however “page” might be defined) means that there is little connection for most users between the advertisers and the service(s) they are trying to support.
And it is not much better in the online video space but that’s a topic for a future post.
I welcome feedback, suggestions, comments, and especially examples of sites, advertisers and even competing ad networks which do get it right (or at least come closer than most) in doing a good job.