6 ms·

The argument here is that even if the user never would have responded to any of the ads anyway, the website loses money when users don't view the ads. I call b

by ggrot 17y ago

The argument here is that even if the user never would have responded to any of the ads anyway, the website loses money when users don't view the ads. I call bullshit. An advertiser is going to pay as much for ads as they can profit from them. At the end of the day, the advertiser wants to spend less on ads than they make in profit from running those ads - they don't care about # impressions, # clicks, or whatever. If an advertiser can make $1.01 profit for every 1,000 random ad impressions, they'll pay $1 or less for those 1,000 impressions. If I can identify half my audience that will never respond to the ad, I'm essentially making $1 for 500 impressions instead of 1,000. I'll happily pay $2 for 1,000 of those more effective impressions. I don't care if you get paid CPM, CPC, or CPA. You aren't making money of the users who don't respond to the ads.

IgorPartola 17y ago
My thought exactly. The difference here is analagous to the difference between a late night show and an "industry" show. Take Jon Stewart as the first. Nobody in the world has any reason to want his show out there every night because he is not generating any sales. He is also not charging for his show. Thus his show is artificially coupled with ads to support it. This us an unnatural relationship and in order to compensate, he has to be really good to get really high ratings. On the other hand take Martha Stewart. A number of industries such as cutlery makers, wineries, home decorators, etc. are benefitting from her show airing. She can be sponsored by any company in any industry and never has to mention them once since she is already bringing them sales. Another example of this are home improvement shows -the directly benefit Lowes and Home Depot.
wanderr 17y ago
As someone who works on a site largely funded through banner advertising, I can confirm that this is true; CPM is tied directly to CTR. A higher CTR means not only a higher CPM but also higher quality ads, so it is in everyone's best interest to not show ads to users who won't click on them. The question then, for a for-profit site, how do you monetize the freeloaders? I thing the answer is: 1. Try to get them to upgrade to a paid subscription. 2. Create highly targeted ads based on the content, and integrate them with that content (ie not from ad servers). Unfortunately, this is only a cost-effective option if you get a high volume of traffic). 3. Restrict freeloaders from using your most expensive resources. I don't imagine a site like Ars is very bandwidth intensive, but if an adblocking user is costing them a lot in bandwidth for some reason, they could provide the content without the images, for example. Sites also should consider how important it is to monetize every user directly. How much of your cost is fixed vs goes up per user? If most of your costs are fixed (paying writers for editorial content, for example) and the cost of providing content to users is low, it may be better to try to maximize readers aven if some of those are freeloaders; users talk and share information and links, so user A with adblock installed, whose visits cost you almost nothing, might result in users B, C and D who don't have adblock installed visiting your site.

by ggrot 17y ago

IgorPartola 17y ago

My thought exactly. The difference here is analagous to the difference between a late night show and an "industry" show. Take Jon Stewart as the first. Nobody in the world has any reason to want his show out there every night because he is not generating any sales. He is also not charging for his show. Thus his show is artificially coupled with ads to support it. This us an unnatural relationship and in order to compensate, he has to be really good to get really high ratings. On the other hand take Martha Stewart. A number of industries such as cutlery makers, wineries, home decorators, etc. are benefitting from her show airing. She can be sponsored by any company in any industry and never has to mention them once since she is already bringing them sales. Another example of this are home improvement shows -the directly benefit Lowes and Home Depot.

wanderr 17y ago

As someone who works on a site largely funded through banner advertising, I can confirm that this is true; CPM is tied directly to CTR. A higher CTR means not only a higher CPM but also higher quality ads, so it is in everyone's best interest to not show ads to users who won't click on them. The question then, for a for-profit site, how do you monetize the freeloaders? I thing the answer is: 1. Try to get them to upgrade to a paid subscription. 2. Create highly targeted ads based on the content, and integrate them with that content (ie not from ad servers). Unfortunately, this is only a cost-effective option if you get a high volume of traffic). 3. Restrict freeloaders from using your most expensive resources. I don't imagine a site like Ars is very bandwidth intensive, but if an adblocking user is costing them a lot in bandwidth for some reason, they could provide the content without the images, for example. Sites also should consider how important it is to monetize every user directly. How much of your cost is fixed vs goes up per user? If most of your costs are fixed (paying writers for editorial content, for example) and the cost of providing content to users is low, it may be better to try to maximize readers aven if some of those are freeloaders; users talk and share information and links, so user A with adblock installed, whose visits cost you almost nothing, might result in users B, C and D who don't have adblock installed visiting your site.