22 ms·

Why ads stopped working

30 points by kgermino 17y ago

ZachPruckowski 17y ago
Part of the problem is that ad companies interpret "engaging" as "distracting" and "annoying".
iamdave 17y ago
I endorse the movement that ads are doing more harm than good because of their overabundance, though if users don't pay attention to seven ads that don't "emotionally engage" them, why are they going to pay attention to one ad that doesn't "emotionally engage" them?
- kgermino 17y ago
  I think he's saying there is so much clutter with ads that users just ignore them completely. Imagine if there was one ad at the top of HN's main stories page: it would still have to be engaging to be effective but even if it is not engaging you would still notice it and be more likely to remember what it was for.
  - blahedo 17y ago
    ...except for <a href="http://en.wikipedia.org/wiki/Banner_blindness>banner http://en.wikipedia.org/wiki/Banner_blindness>banner blindness</a>, anyway.
    - Luyt 17y ago
      http://en.wikipedia.org/wiki/Banner_blindness http://en.wikipedia.org/wiki/Banner_blindness
      - robryan 17y ago
        Easy to combat this though, a HN ad would just be a sponsored thread, although people can eventually ignore this given the time that HN has ran ad free, if there really was a need for an ad they could be really picky about only advertising things that the community would be interested in.
        comex 17y ago
        This is basically what Reddit does.
- AlexBlom 17y ago
  +1 to kgermino . The difference is I will notice the ads now instead of train myself to not see them.
SlyShy 17y ago
Precisely why targeted advertising networks like The DECK are working.
- webwright 17y ago
  Any data on this? I like the idea of The Deck, but I've never read any data saying, "Ads on the Deck boost sales." I'd love to hear if that's the case. edit: took a look at the Deck's page and they talk about "cost per influence".
  - SlyShy 17y ago
    They don't publish statistics, but at their rates ($7,900 a day, sheesh) I find it hard to believe they'd have repeat customers if it didn't work. The list of companies advertising includes a lot I've seen every single month since the network started, so I think that's a good indication.
    - vaksel 17y ago
      it might work for advertisers, but as these guys themselves say: "We’re not selling The Deck based on page views or hits or click-through, but if we were, the CPM for a buy here would be priced well below industry norms." So according to themselves, the publishers running these ads are making less money than they would with any other program.
      - SlyShy 17y ago
        Six months ago (keep in mind the rate for an ad placement was lower back then) I heard a figure of $4,000 a month for a Deck Network publisher. Which is a lot better than I've heard of a similar Google Ads setup doing (it's about enough space for maybe two text links).
        natrius 17y ago
        The Deck requires you to only show that one ad on the page. You can show more Google ads without losing readership. There is something to be said for the clean, appealing pages that sites using the Deck end up with since they aren't cluttered with ads, but that is likely (opportunity) costing the publishers money.
mattmaroon 17y ago
"Instead of plastering every available inch with an advert, showing restraint and allowing few ads on a platform will likely increase their effectiveness and value." In the age of A/B testing, this is just incredibly stupid logic. If Myspace has 17 ads on a page, it's most likely because multivariate testing showed that 17 was the optimal number in terms of their eCPM. It's always humorous when some guy with a blog assumes he knows better than the company with a zillion page views per day and access to abundant performance metrics.
- AlexBlom 17y ago
  I don't see why there cannot be AB testing with fewer ads. The point I was working towards was that there is so much clutter we ignore most of them. That means Myspace may earn more money but the ads are not as effective. As soon as a more efficient channel is found Myspace is dumped. We see this issue happen over and over.
  - byrneseyeview 17y ago
    A/B testing as in: Case A is showing one ad, case B is showing two. B wins. Then Case A is showing two, and Case B is showing 3. Sixteen tests later, they hit their peak revenue. Actually, they probably leave some money on the table: they'll get a higher net present value if they reduce the number of people who quit in disgust, and for some people, the disgust from ads is cumulative. Thus, 20 ads might get them more revenue per page, but fewer page views in the future.
    - AlexBlom 17y ago
      Understood. I'm not talking about effectiveness for the publisher but for the marketer. As a consumer the more ads I see in a single space the more likely I am to remember none of them. My point is that there is a balance and ad rates are falling in over-populated mediums because we know that the better chance people have of seeing the ads the higher chance we have of catching their interest. A startup I am watching which is trying this is influads.com
jessriedel 17y ago
Does the author think that advertisers and web designers are idiots? If the websites could increase click-through rates just by decreasing ad density, why wouldn't they?
- deleted 17y ago
  [deleted]
- drivingsouth 17y ago
  compromise? Sometimes, you have to consider different costs beside direct revenue since that may be hurt in the long-run
byrneseyeview 17y ago
Unfortunately, this seems to be completely wrong. In fact, the medium with the most measurably successful ads is the infomercial--it's 100% ad. For any purchase intent-driven Google query, you can be pretty sure that most of the top ten search results are 'ads' (i.e. someone is spending time or money on getting those pages to rank better, in order to sell a product), and that business is growing fast. It's unfortunate that people in the best position to talk about ads also find them distasteful.
- AlexBlom 17y ago
  I think the difference is that an infomerical is effectively one ad. Personally I am not against marketing / ads at all, I just think they need to be utilized properly. The scenario I am speaking of is more akin to playing 4 infomercials at once. Suddenly neither really catch our attention and have the chance to suck us in like playing one infomercial does.
- mikecane 17y ago
  The thing about infomercial is that "info" part. Sometimes they are actually creating a market through the process of education. If you look at some of Apple's iPhone ads, those are sort of compressed -- in the JG Ballard sense -- infomercials, quickly demonstrating several apps that solve various problems.
btilly 17y ago
Who is the king of advertising online? Google! Look at how they do their ads. Yet they make more from advertising than anyone else, and if you measure results give real value for money. Sometimes people simply hear you better when you're not yelling.
- natrius 17y ago
  Search ads are very different from content ads. People click on search ads because they look like search results and they often give the user what they were looking for. There isn't a huge quality difference between search engines, so sticking ads everywhere would likely lead to an exodus of users. Content ads make money because people see something that catches their eye while reading the content they came to the site for. This requires having several ad spots rather than just a couple at the top of search results. Content is usually unique, so there's a high annoyance bar to reach before you start to drive people away. Yes, fewer ads make the ads shown more effective. I remember Hulu ads more often than I remember TV ads. (Then again, I watch far more Hulu than TV these days.) The problem with this approach is that advertisers aren't willing to pay enough money to cover the losses from showing fewer ads. What you and the author are suggesting is a demonstrably unsuccessful strategy for someone who is running a website until you can convince advertisers to pay more money for ads with less competition on the page. I don't think this is impossible.
  - btilly 17y ago
    I agree that users get confused over what is a search result and what is an ad. However Google tries to make it clear which is which and to avoid confusion. However Google has ads in a lot of places other than search. And makes a lot of money on them. Yet somehow they also haven't turned gmail, youtube, picassa, and maps into banner-fests.
jsz0 17y ago
For a site like Myspace with declining traffic I would guess they're simply trying to make as much money as they can while traffic levels are still high enough to make it work. Does anyone think Myspace can turn it around and start growing again? I doubt it. They have no incentive to look at a bigger picture of what's good for advertisers or visitors at this point. Might as well make as much money as possible during the long drawn out death spiral.
MDX 17y ago
Just my 2 cents - I help run a company that sell products to middle America (soccer moms, dads, kids etc) and the only advertising that has paid off for us has been timely relevant advertising (Google, Yahoo, etc). We tried Facebook, banner ads, etc with no luck. We also started our own affiliate program (every customer automatically becomes an affiliate) and trained our customers how to refer their friends and family to us. That has paid off better than buying ads space on blogs or news sites. There may be some types of ads that do very well as banners on general news sites (I'm thinking of those weight loss and bad breath ads) but it hasn't worked out for us at all. It all depends on your market, the people who visit the sites you advertise on as well the information contained in your actual ad.
resdirector 17y ago
I naively contend that advertising is currently at a local maxima, but not at a global maxima. I contend that for a really successful advertisement framework two things must happen: (1) Ad relevancy must be above a very high threshold, else users will filter out all advertisements, even if some are relevant. This threshold is demographic dependent. (For HN crowd, I contend it would be around the 90% mark...I, for one, still ignore gmail advertisements). (2) Users must trust that the advertisement will give a good deal, else they will just go to Amazon, eBay etc to buy the product instead. I think trust is an often overlooked aspect of advertising, and is a difficult problem to solve. If ever I get around to building an advertising framework around my app, I will attempt to err on the side of not running advertisements rather than risk losing the relevancy and trust battle.

30 points by kgermino 17y ago

Part of the problem is that ad companies interpret "engaging" as "distracting" and "annoying".

I endorse the movement that ads are doing more harm than good because of their overabundance, though if users don't pay attention to seven ads that don't "emotionally engage" them, why are they going to pay attention to one ad that doesn't "emotionally engage" them?

kgermino 17y ago
I think he's saying there is so much clutter with ads that users just ignore them completely. Imagine if there was one ad at the top of HN's main stories page: it would still have to be engaging to be effective but even if it is not engaging you would still notice it and be more likely to remember what it was for.
- blahedo 17y ago
  ...except for <a href="http://en.wikipedia.org/wiki/Banner_blindness>banner http://en.wikipedia.org/wiki/Banner_blindness>banner blindness</a>, anyway.
  - Luyt 17y ago
    http://en.wikipedia.org/wiki/Banner_blindness http://en.wikipedia.org/wiki/Banner_blindness
    - robryan 17y ago
      Easy to combat this though, a HN ad would just be a sponsored thread, although people can eventually ignore this given the time that HN has ran ad free, if there really was a need for an ad they could be really picky about only advertising things that the community would be interested in.
      - comex 17y ago
        This is basically what Reddit does.
AlexBlom 17y ago
+1 to kgermino . The difference is I will notice the ads now instead of train myself to not see them.

SlyShy 17y ago

Precisely why targeted advertising networks like The DECK are working.

webwright 17y ago
Any data on this? I like the idea of The Deck, but I've never read any data saying, "Ads on the Deck boost sales." I'd love to hear if that's the case. edit: took a look at the Deck's page and they talk about "cost per influence".
- SlyShy 17y ago
  They don't publish statistics, but at their rates ($7,900 a day, sheesh) I find it hard to believe they'd have repeat customers if it didn't work. The list of companies advertising includes a lot I've seen every single month since the network started, so I think that's a good indication.
  - vaksel 17y ago
    it might work for advertisers, but as these guys themselves say: "We’re not selling The Deck based on page views or hits or click-through, but if we were, the CPM for a buy here would be priced well below industry norms." So according to themselves, the publishers running these ads are making less money than they would with any other program.
    - SlyShy 17y ago
      Six months ago (keep in mind the rate for an ad placement was lower back then) I heard a figure of $4,000 a month for a Deck Network publisher. Which is a lot better than I've heard of a similar Google Ads setup doing (it's about enough space for maybe two text links).
      - natrius 17y ago
        The Deck requires you to only show that one ad on the page. You can show more Google ads without losing readership. There is something to be said for the clean, appealing pages that sites using the Deck end up with since they aren't cluttered with ads, but that is likely (opportunity) costing the publishers money.

mattmaroon 17y ago

"Instead of plastering every available inch with an advert, showing restraint and allowing few ads on a platform will likely increase their effectiveness and value." In the age of A/B testing, this is just incredibly stupid logic. If Myspace has 17 ads on a page, it's most likely because multivariate testing showed that 17 was the optimal number in terms of their eCPM. It's always humorous when some guy with a blog assumes he knows better than the company with a zillion page views per day and access to abundant performance metrics.

AlexBlom 17y ago
I don't see why there cannot be AB testing with fewer ads. The point I was working towards was that there is so much clutter we ignore most of them. That means Myspace may earn more money but the ads are not as effective. As soon as a more efficient channel is found Myspace is dumped. We see this issue happen over and over.
- byrneseyeview 17y ago
  A/B testing as in: Case A is showing one ad, case B is showing two. B wins. Then Case A is showing two, and Case B is showing 3. Sixteen tests later, they hit their peak revenue. Actually, they probably leave some money on the table: they'll get a higher net present value if they reduce the number of people who quit in disgust, and for some people, the disgust from ads is cumulative. Thus, 20 ads might get them more revenue per page, but fewer page views in the future.
  - AlexBlom 17y ago
    Understood. I'm not talking about effectiveness for the publisher but for the marketer. As a consumer the more ads I see in a single space the more likely I am to remember none of them. My point is that there is a balance and ad rates are falling in over-populated mediums because we know that the better chance people have of seeing the ads the higher chance we have of catching their interest. A startup I am watching which is trying this is influads.com

jessriedel 17y ago

Does the author think that advertisers and web designers are idiots? If the websites could increase click-through rates just by decreasing ad density, why wouldn't they?

deleted 17y ago
[deleted]
drivingsouth 17y ago
compromise? Sometimes, you have to consider different costs beside direct revenue since that may be hurt in the long-run

byrneseyeview 17y ago

Unfortunately, this seems to be completely wrong. In fact, the medium with the most measurably successful ads is the infomercial--it's 100% ad. For any purchase intent-driven Google query, you can be pretty sure that most of the top ten search results are 'ads' (i.e. someone is spending time or money on getting those pages to rank better, in order to sell a product), and that business is growing fast. It's unfortunate that people in the best position to talk about ads also find them distasteful.

AlexBlom 17y ago
I think the difference is that an infomerical is effectively one ad. Personally I am not against marketing / ads at all, I just think they need to be utilized properly. The scenario I am speaking of is more akin to playing 4 infomercials at once. Suddenly neither really catch our attention and have the chance to suck us in like playing one infomercial does.
mikecane 17y ago
The thing about infomercial is that "info" part. Sometimes they are actually creating a market through the process of education. If you look at some of Apple's iPhone ads, those are sort of compressed -- in the JG Ballard sense -- infomercials, quickly demonstrating several apps that solve various problems.

btilly 17y ago

Who is the king of advertising online? Google! Look at how they do their ads. Yet they make more from advertising than anyone else, and if you measure results give real value for money. Sometimes people simply hear you better when you're not yelling.

natrius 17y ago
Search ads are very different from content ads. People click on search ads because they look like search results and they often give the user what they were looking for. There isn't a huge quality difference between search engines, so sticking ads everywhere would likely lead to an exodus of users. Content ads make money because people see something that catches their eye while reading the content they came to the site for. This requires having several ad spots rather than just a couple at the top of search results. Content is usually unique, so there's a high annoyance bar to reach before you start to drive people away. Yes, fewer ads make the ads shown more effective. I remember Hulu ads more often than I remember TV ads. (Then again, I watch far more Hulu than TV these days.) The problem with this approach is that advertisers aren't willing to pay enough money to cover the losses from showing fewer ads. What you and the author are suggesting is a demonstrably unsuccessful strategy for someone who is running a website until you can convince advertisers to pay more money for ads with less competition on the page. I don't think this is impossible.
- btilly 17y ago
  I agree that users get confused over what is a search result and what is an ad. However Google tries to make it clear which is which and to avoid confusion. However Google has ads in a lot of places other than search. And makes a lot of money on them. Yet somehow they also haven't turned gmail, youtube, picassa, and maps into banner-fests.

jsz0 17y ago

For a site like Myspace with declining traffic I would guess they're simply trying to make as much money as they can while traffic levels are still high enough to make it work. Does anyone think Myspace can turn it around and start growing again? I doubt it. They have no incentive to look at a bigger picture of what's good for advertisers or visitors at this point. Might as well make as much money as possible during the long drawn out death spiral.

MDX 17y ago

Just my 2 cents - I help run a company that sell products to middle America (soccer moms, dads, kids etc) and the only advertising that has paid off for us has been timely relevant advertising (Google, Yahoo, etc). We tried Facebook, banner ads, etc with no luck. We also started our own affiliate program (every customer automatically becomes an affiliate) and trained our customers how to refer their friends and family to us. That has paid off better than buying ads space on blogs or news sites. There may be some types of ads that do very well as banners on general news sites (I'm thinking of those weight loss and bad breath ads) but it hasn't worked out for us at all. It all depends on your market, the people who visit the sites you advertise on as well the information contained in your actual ad.

resdirector 17y ago

I naively contend that advertising is currently at a local maxima, but not at a global maxima. I contend that for a really successful advertisement framework two things must happen: (1) Ad relevancy must be above a very high threshold, else users will filter out all advertisements, even if some are relevant. This threshold is demographic dependent. (For HN crowd, I contend it would be around the 90% mark...I, for one, still ignore gmail advertisements). (2) Users must trust that the advertisement will give a good deal, else they will just go to Amazon, eBay etc to buy the product instead. I think trust is an often overlooked aspect of advertising, and is a difficult problem to solve. If ever I get around to building an advertising framework around my app, I will attempt to err on the side of not running advertisements rather than risk losing the relevancy and trust battle.