So, Prof. Clemons of The Wharton School of the Univ. of Penn. has done a study basically predicting a steep decline in revenue generated by online advertising within the next 5 years, and
written a nice piece about it for TechCrunch.
While I am aware that there's
a lot a whole lot of money being thrown around out there on internet ads, I don't pay much attention to the trends or ups and downs of that business. However, I do consider myself more-or-less an average consumer, and I do at least 75% of my shopping online. RARELY OR NEVER, though, do sponsored links or banner ads come into the picture.
Most will agree that pretty much every business needs some form of advertising to grow. The oldest and most influential and trustworthy form would be word-of-mouth advertising. Your friend tells you he tried a new barber the other day and had a
great experience, loved the service, reasonable pricing, short wait time, etc., that is an enormous plug for that establishment and you will remember that next time you get POed with your regular hair-cutter, but still need a trim.
"Hmmm... John said that place over on Central was really good. I think I'll give it a try."
Eventually, every media outlet that comes along (newspapers, billboards, radio, television, cinema, internet, SMS and text messages) will include advertising. Every flat surface in sports stadiums is plastered with logos. Anything that people spend more than a few moments in, around, on, at, or with on a regular basis will be used as an outlet for advertising. That's just the way it works. Supposedly, the more frequently you advertise and the more widespread your advertising (across multiple mediums and location-wise), the more business you will get and the more revenue you will generate. However, because of the ease and relatively low-cost of internet advertising, the practice of drawing in consumers via this medium has become extremely excessive. Though a company may pay out the wazoo depending on where and how often their ads are placed on web pages, the cost to actually place these ads on those pages is next to nothing. Therefore, they're everywhere. Sometimes, the same ad will appear in three our four different places on a single web page, all of them "above the fold"!
Now, I cannot speak for everyone, but I do not trust any kind of online ad or sponsored link, and there are only a couple of reasons that will ever make me bring my mouse-pointer near them.
- By clicking said ad or link, I'm supporting or generating revenue for an individual or charitable organization that I want to help out
- By clicking said ad or link, I'll receive some sort of promotional coupon or discount off the price I would have paid had I not gone through the ad or link (for example: my online broker, Scottrade, advertised a percentage off TurboTax e-filing fees if I clicked through the little ad on their site)
Even then, I'm wary. Because most banner ads are javascript-based, they can incorporate all sorts of things into the redirect you get into by clicking on them. I don't trust this and if I
do see something advertised that I'm interested in, I will go Google the company or product and pull it up the conventional way (NOT via sponsored links). In this sense, sites that generate revenue based on how many people actually click or open the ads/links on their sites does not work with me (or a lot of people, I suspect). Even worse are those that receive money based on how many people click through and then
actually spend money.
Now, in a different sense, advertising still kind of works because it may be informing you about a product or service you may not have seen before, or saw and were interested in but forgot about. This will either generate or renew interest, in which case the company behind the ad has successfully gotten your attention, and, thus, can potentially make a sale. While you may have nothing else to do with the ad after that, the brand name and/or product are on your mind.
However, as professor Clemons noted, even this kind of advertising is, in a way, unneeded. In an information age when people carry the internet around in their pockets and have instant access to an unfathomable amount of information, the only real purpose of an ad anymore is to get your name out there. People need merely see a Sony logo next to a new MP3 player model, and can get all the information they want (and then some), by running a quick search on "Sony MP3 player". Instantly, links for customer reviews, tech-expert reviews, online retailers, blog postings, Wikipedia entries and the official site will be displayed, and consumers can pick and choose the information they wish to receive about the product. Gone are the days of 5-10 minute television ads where the product is modeled, tested, reviewed, explained, and even shown throughout its manufacturing process. In those days, that was one of the only means people had for learning about this latest and greatest thing they were supposed to be spending their hard-earned dollars on. Now, you can find out almost everything about anything even before it's made available to regular consumers. Bits of information are leaked throughout the early developmental stages so that you could practically rattle off all the features and tech specs a month before the product has hit the mass market.
I'm sure everyone's seen at least one or two films set in the "future" featuring cityscapes plastered with various means of advertising. Everywhere you look, flashing signs and giant LCD screens and posters. Ever notice that most of what's featured are simply logos and catchphrases? Companies want their names to be the first thing that pops into Joe-consumer's mind when he thinks about certain products. Keep flashing it at him over and over and over, and that may just do the trick. However, as an informational outlet, or as a means of generating any kind of revenue other that which comes from pointing consumers in your direction (preferably before your competitors) to spend their money, online ads are slowly but surely becoming obsolete.