Mike on ads is a website that I really like. Anyone who is interested in knowing more about ad networks and online advertising should check it out.
Online advertising sure is a hot topic these days. While the phenomenon is spreading across the Internet very rapidly, it presents a huge weakness. Publishers seeking to sell their inventory have to keep in mind consumers are actually the producers: visitors create the inventory and are exposed to the advertisements.
Well, it all depends on how you look at it: advertisers are the ones buying the inventory while publishers are the ones selling that same inventory. To the first degree, advertisers are the actual consumers of the advertising space on a website. Ultimately, the users are the ones seeing the ads, hence the ones who ‘consume’ them.
Let’s push the analysis further; as I mentioned, advertising business model is huge nowadays on the Internet. More and more publishers rely on this sort of business model to cover for the ‘free’ services they offer over the web. In the long run, is this efficient? Can all these websites and web projects survive with this kind of business model?
I don’t think so.
The advantage of online over traditional advertising relies on its targeting abilities. Any producer of goods and/or services advertises for marketing purposes. Advertising triggers sells (hopefully!) with a certain cost. Under perfect information, the advertiser knows exactly to whom it should show ads to maximise ROI. Under imperfect information, advertisers spend a lot more of marketing costs because they try to reach broader audiences, most of them who are not potentially customers. Not now, not ever. So advertisers are left paying buffer placements.
Internet is said to be a place where the content adapts to consumers, not the opposite. The more information we possess on users, the less advertisers will pay for buffer placements. All things held equally, in the long run advertiser’s budgets should diminish.
Fortunately, we can never know for sure what consumers want. Let’s not forget the fact people change over time. Personally, I don’t want the same stuff today that I wanted 15 years ago and so do you.