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This is part of a trend that's just starting. I was the editor in chief at Dr. Dobb's, which many of you know closed down in December. As I explained in my far

This is part of a trend that's just starting. I was the editor in chief at Dr. Dobb's, which many of you know closed down in December. As I explained in my farewell editorial [1], our ad sales were squeezed by a comparatively recent phenomenon in media, which is a very steep drop in vendors' willingness to buy Web ads--a lifeline for most web sites. The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad. For certain consumer sites, that's a survivable problem. For example, Budweiser's ads aren't intended to make a sale, but rather to remind people of the brand. However, for many tech companies (those that aren't tier 1), they don't have the funds to do brand-oriented ads. Their ads need to result in clicks and purchases. And that's just not happening on pure websites. (FB and Twitter are a wholly different category.) Personally, I expect that more web sites in the tech sector that have depended in the past on advertising will either fail or drastically cut back on their offerings. [1] http://www.drdobbs.com/240169421 http://www.drdobbs.com/240169421

vonnik 12y ago
Great comment. As part of the marketing team at a well funded but very money-conscious startup, I can confirm this awareness that most web ads have no visible effect on the bottom line, or the cost of customer acquisition is so high as to be prohibitive. On the web, people are overwhelmed with marketing messages. It's very hard to find the right demographic, and then to convince them to act. This has always been true, but it has become much more measurable since the Internet came along. Unless you are a large corporation with the belief that "branding" can be bought, and the budget to back it up, there's no reason to buy online ads in most venues.
- rsync 12y ago
  Can you (or andrewbinstock) comment with regard to google adwords ? I don't think of those as the same thing as banner ads ...
  - Scoundreller 12y ago
    As a (very) small-time publisher, but with a fairly reasonable sample over the years, CPM ads pay about 1/5th what CPC ads do. I think that shows how much "brand awareness" versus "I'm trying to make a sale" advertising is worth. Edit: CPM pays 1/3rd the rate, but CPC ads make up 90% of revenue, which makes sense if they generally pay more. I run a rather diverse set of sites, but I stay away from tech.
  - andrewbinstock 12y ago
    You're right they're not the same as banner ads. Alas, I don't enough about their economics to provide an intelligent insight.
  - vonnik 12y ago
    We haven't found a way to make Google Adwords work for us. Maybe it can be done in other industries. The key words in ours have been bid way up.
    - wazoox 12y ago
      I concur. Back in 2006-2008, AdWords was incredibly effective for my company, then the leads gradually dried up, and after a while we realized it provided nothing useful anymore, unless you buy incredibly expensive keywords (up to several dollars per click). It may still be effective for pure consumer-oriented services, but is IMO useless nowadays for B2B unless you're a large, deep-pocketed company.
    - rsync 12y ago
      We've had that trouble as well - anything related to offsite backup or cloud storage has outrageous pricing - perhaps $8 or $12 per click (!). The frustrating thing is that if you do find keywords that have low prices, google will refuse to run them for you because too few people search for it. Citing "low quality", google will force you to artificially inflate your CPC just for the privilege of running a niche keyword. There is this idea that every day there are X people on the web searching for exactly what you offer, and if you show them an ad during the search: success. I believe this to be true, but google makes it all but impossible to pursue low traffic, niche searches. They literally refuse to run them.
- greggman 12y ago
  That's very interesting. Back before the internet was huge I used to subscribe to 3-5 computer magazines. PC Magazine, Wired, ... I don't even remember the other ones, probably mostly video game mags. I used to look forward to the ads just as much as the articles because it was a way to find out about new products. Now though I need no such ads. I see the announcement on the various tech sites or from friends that read the tech sites. Almost zero need or interest in ads anymore and pretty much do my best to ignore them.
michaelbuckbee 12y ago
Andrew, any insight into the prevalence of AdBlockers among your tech savvy audience? Do you feel that was a factor?
- andrewbinstock 12y ago
  Very hard to say. I tend to doubt it. Even before ad blockers became popular, the number of click throughs was very, very low. What was different then was that vendors viewed Web ads as an expensive form of advertising, but one which they had to do.
chvid 12y ago
With publishers dropping off like this; when will the decreased business show up in Google's revenue? Google being the biggest advertisement broker thru AdSense and similar programmes.
- Scoundreller 12y ago
  More people are spending more time on the internet on more devices. So far, this has protected Google from decline. Eventually Google will become a blue-chip stock because they can consistently match advertisements to users better than anyone else can.
  - chvid 12y ago
    If the publisher's revenue drops due to there being more publishers then Google and similar would be safe but andrewbinstock writes that it is vendors that have lower willingness to pay for online advertisement; they are simply spending less on online advertisement. That should effect Google all things being equal.
- nikcub 12y ago
  > With publishers dropping off like this; when will the decreased business show up in Google's revenue? Never. Publishers aren't dropping off in sum, just the bad ones are cycling out and are being replaced with more nimble, relevant, cheaper, etc. content providers (ie. Grandparents thesis is not correct and is anecdotal) There are is more and better inventory than ever and more audience than ever and both are growing at staggering rates.
  - jsmthrowaway 12y ago
    Nothing is more amusing than a former employee of TechCrunch subtly swiping at the relevance of Dr. Dobb's Journal. Without a doubt, that's the funniest thing I've ever read in this line of work and says everything one would ever need to say about certain elements of the Silicon Valley culture. Your analysis is just plain wrong, by the way. Dr. Dobb's was punished for delivering content. Turns out, advertising doesn't work as advertisers hope on people who actually enjoy content. When you deliver actual content at some point in your career, you will discover this to be true as well.
tzs 12y ago
> The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad There have been a few times I've seen an ad on a website that looked like it was for something I wanted, and wanted to click it. The problem is that I pretty much ignore the ads while I'm reading the page content, and so I only noticed these ads when I'd finished the content and clicked a link to leave the page, and my eyes are wandering while I wait for the new page to start loading. I click back to try to get back to the ad, and something else has taken over its spot. I might refresh a few times to try to get the desired ad back, but that has never worked for me.
- Bill_Dimm 12y ago
  I've been saying exactly this for quite a while. It is so incredibly stupid to replace the ads when the back button is hit. The probability that I hit the back button to click one of the ads is quite high, and the probability that I'll want to click one of the new ads that replace the one I was trying to get to is virtually zero.
- ankitoberoi 12y ago
  > There have been a few times I've seen an ad on a website that looked like it was for something I wanted, and wanted to click it. Absolutely. IMO, Banner Blindness alone is the biggest reason why web publishers are facing difficulty in monetising web inventory. Many a times, people don't notice ads even if they were relevant to them, just because of banner blindness. In fact, 3 out of 10 display ads are never seen [1] [1] http://www.adpushup.com/blog/banner-blindness/ http://www.adpushup.com/blog/banner-blindness/ (Disclosure: I wrote this)
mathattack 12y ago
There is a trend towards awareness advertising - I think this is because the Super Bowl is barely more measurable than a bunch of display ads. The amount of $ spent on web and mobile advertising is tiny compared to the time spent there. If branded ads can make it on TV, perhaps that's the future rather than click through.
- Scoundreller 12y ago
  Absolutely. But awareness advertising doesn't pay as well (yet?). The real money is getting people at the edge of making a purchase to make that purchase, whatever it may be. And the ability for the web (or any advertising, for that matter), is increasingly being called into question (or people are getting better at questioning such purchases).
  - mathattack 12y ago
    This is true. If I got a "$100 better than your best competitive offer" ad when I was car shopping, I would have clicked through. There was enough data on my phone to suggest this was the case.
Scoundreller 12y ago
> which is a very steep drop in vendors' willingness to buy Web ads Any relative or absolute numbers you'd like to share? > The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad. My favourite experience with this was when I was selling a computer case and researched its specs on newegg.com. Then for a while all I saw were retargeted ads from newegg trying to sell me that case. Nonono, I didn't have one too few computer cases, I had one too many. I was the complete opposite of their target audience, heh.
- whoopdedo 12y ago
  You're example is obvious because Newegg can't tell the difference between market research because you're about to buy versus research because you're about to sell. But it's always amused me (in a not very amusing way) that immediately after I purchase something I'm inundated with advertisements from the same vendor trying to sell it to me again. Big data is supposed to be about finding statistical relationships between events, right? In what world would the probability of someone buying something be highest when they're holding a brand new one in their hands? What it really makes me think is the web advertising folks are pulling a con on their clients. They're not actually doing the critical analysis they promise but simply sorting by linear distance in n-dimensional space and hoping no one notices how useless the measurement is.
  - Scoundreller 12y ago
    > Newegg can't tell the difference between market research because you're about to buy versus research because you're about to sell I agree. I think it would be very difficult for them to tell the two states apart, but I found it amusing.
    - whoopdedo 12y ago
      Isn't this a market opportunity, though? Make a website that provides product information for people who want to sell an item. Give tips on how to advertise and mail the item. Sell packaging supplies. Why isn't Ebay already doing this?
mikeleeorg 12y ago
And on to of that, Gigaom tried the shift away from ads to subscriptions: Instead, we opted to take the road less traveled — subscription revenues. [1] Which still did not bring in enough revenue. [1] https://gigaom.com/2014/02/20/now-that-gigaom-is-all-grown-up-its-time-for-the-next-chapter/ https://gigaom.com/2014/02/20/now-that-gigaom-is-all-grown-u...
- ilamont 12y ago
  I had no idea their headcount was 70. It would be hard to maintain such a large staff unless research + events + advertising + other were doing really, really well.
- Steko 12y ago
  It's not advertising that's the problem as many in the comments seem to think; it's the shitty type of ads these 90s websites were all built around. The recent Marissa Mayer piece in Medium [1] made much of the fact that her big accomplishment so far was transitioning from the old dying Banner ads model to a mobile/video/social/fake content friendly model. Also consider this bit from buzzfeed [2] which I first saw from stratechery's great article [3] on them. The banner ad, whose decline Farhad Manjoo recently celebrated, was also born during this era and created a business model in which clicks are tied directly to dollars — something many people assume is still how all online publishers make their money. But BuzzFeed has never sold a banner, and I couldn't even tell you how many monthly page views we get. And so our business model at least moderates that incentive to drag every last click out of our audience. [1] https://medium.com/backchannel/marissa-mayer-has-completed-step-one-71dc31912855 https://medium.com/backchannel/marissa-mayer-has-completed-s... [2] http://www.buzzfeed.com/bensmith/why-buzzfeed-doesnt-do-clickbait#.giGNn3djZ http://www.buzzfeed.com/bensmith/why-buzzfeed-doesnt-do-clic... [3] http://stratechery.com/2015/buzzfeed-important-news-organization-world/ http://stratechery.com/2015/buzzfeed-important-news-organiza...
nikcub 12y ago
Taking venture capital and starting at -$22M doesn't help. There have been a lot of very successful and profitable media companies[0]. The industry isn't broken (far from it), just some of the models are. This also isn't a new revelation: Arrington wrote a post on TechCrunch in 2008 warning other bloggers not to raise money[1] Re: the effectiveness of advertising. This is a $120B+ annual industry with entire billion-dollar sub-industries involved in measuring its effectiveness and optimizing value. If it didn't work it would have slowed, shrunk and or shut down a long time ago - but rather it is growing insanely each year. Advertisers and the over-qualified engineers working in adtech are not idiots. [0] TechCrunch (disclaimer: worked there, profitable - sold), ReadWriteWeb (profitable - sold), Huffington Post (profitable, sold for $350M+), ProBlogger (profitable), etc. etc. etc. [1] http://techcrunch.com/2008/03/19/more-bloggers-raising-money-here-come-the-politics-and-here-comes-my-rant/ http://techcrunch.com/2008/03/19/more-bloggers-raising-money...
- vonnik 12y ago
  I'm not sure that all the examples you cite are evidence of very successful and profitable media companies. ReadWriteWeb was acquired by SAY Media for less than $5M and they cut it loose two years later. HuffPo wasn't turning a profit for AOL in 2013, and Tim Armstrong wouldn't say in Dec. 2014 if it was earning a profit, which basically means it's not. In any case, HuffPo's revenue is largely driven by rehashing the original reporting of other outlets, and that is definitely not sustainable journalism. [0]http://techcrunch.com/2014/11/13/say-media-selling-off-readwrite-xojane/ http://techcrunch.com/2014/11/13/say-media-selling-off-readw... [1]http://www.businessinsider.com/aol-huffington-post-profit-2013-12 http://www.businessinsider.com/aol-huffington-post-profit-20... [2]http://www.businessinsider.com/huffington-post-over-200m-revenue-says-tim-armstrong-2014-12 http://www.businessinsider.com/huffington-post-over-200m-rev...
  - declan 12y ago
    <nikcub> is certainly right about the dangers of raising venture capital as a media company. Few news organizations generate outsize returns. In terms of companies sold, there's also CNET, which was sold for $1.8B to CBS in 2008. That was after an operating loss of $6M in 1Q 2008.
LiweiZ 12y ago
As a 100% layman, I spent 20 mins thinking about the ad issue. The easiest way out I can find is to have some kind of location-based ad system to increase the degree of connection between a user and the ad content. Is it feasible technically and commercially? I would like to learn more. Thanks.
- NKCSS 12y ago
  That's already being done; in mobile based on your GPS/cell location and otherwise based on your IP (not very specific, but a general location work pretty well).
  - linker3000 12y ago
    Working for a UK-based division where our corporate Internet gateway ingress/egress is in San Jose, things do get confusing - for example, when I browse ebay.co.uk, (in my lunch hour, of course!) without logging in, the postage charges are astronomical as ebay assumes the UK sellers have to ship to California.
  - LiweiZ 12y ago
    Yes, I know. But most of the time we see ads on bigger screens. The location-based ads have way less location awareness in my experience. I guess, besides the ads from your neighbours (location aware ads), there should be some kind of quicker balance feedback between ad bidding system and what user really pays attention to. Just think about the ads we see in the paper-media-only age, different ads occupied different places. Online ads have not reached that point yet. I wish we could get to that point earlier to make more quality content makers' life easier sooner.
declan 12y ago
Here are some stats on advertising cost per thousand views (CPMs) from mid-2014, which may be relevant: http://monetizepros.com/blog/2014/average-cpm-rates/ http://monetizepros.com/blog/2014/average-cpm-rates/ Some excerpts: Average CPM for business & finance: $6.15 Average CPM for technology: $4.56 Average CPM for style and beauty: $1.48 So at $4.56 per thousand views, assuming one ad per page, even if an article does 20K views, that's only $91. This is why news organizations look for differentiators; it's what we did when I was at Wired and CNET, though I was on the editorial side, not advertising. Unfortunately not all news organizations succeed; Gigaom did events and had a paid research arm, but that wasn't enough. I'm also still mourning Dr. Dobb's, which I first read as a teenager. :(
- diminish 12y ago
  I am managing a 7 digit banner ad budget which helps my client generate a profitable 8 digit income in education business. So no display advertising isn't dead for advertisers, because possibilities are more. The problem with Gigaom and DDJ is that they have low capacity with not much relevance advantage. One single programmer can run a web site with tenfold their capacity with a fraction of their cost. In contrast one can claim banner (outdoor, indoor or web) never really worked except for some carefully chosen "success stories", and now advertisers can measure.
  - hibbelig 12y ago
    What does "low capacity with not much relevance advantage" mean? My understanding is that DDJ (at least) has great content that "one single programmer" couldn't hope to match.
    - majani 12y ago
      Low capacity means they lack the man power to do fancy custom campaigns( think Vox Media level customization http://www.voxmedia.com/vox-advertising http://www.voxmedia.com/vox-advertising ) Relevance advantage means that a site is so big and important in a broad category that it's worth it for advertisers to pay a premium to get frequent views from its readers( think of how TechCrunch is so central to the tech community)
makeitsuckless 12y ago
I'm sure that is true, but aren't we overlooking the fact that the tech sector has an extreme amount of content to offer compared to any other sector? Plus there's a large amount of content that can be had straight from the source. Wasn't it simply due for a shakeout regardless?
- kalleboo 12y ago
  > Plus there's a large amount of content that can be had straight from the source? Exactly. How many articles have been written in the past day on the new MacBook that are actually just worse than reading the Apple.com page itself. Filtering can be done by link-sharing sites like HN and Reddit.
  - droidist2 12y ago
    Yeah, the echo chamber gets really tiresome.
jacquesm 12y ago
The curse of Dr. Dobbs was simply that the content was so good the ads were not able to compete for relevancy. This is a weird paradox: really good content attracts audiences but crappy content makes them click through on ads (and probably still not purchase anything but at least there is some effect for the ad buyer they can measure beyond 'impressions'). Lots of fond memories of the print edition, that's where I learned a whole bag full of useful tricks when information was a lot harder to come by than today.
- Natsu 12y ago
  I'm starting to fear that the only publications to survive will be pure clickbait.
  - Arnt 12y ago
    Some do well with real content. Economist is well known on HN. But the Economist charges a fee. In .de, SZ, Zeit and Spiegel appear to do tolerably. (I subscribe to the first of the three.) Two of them charge real money, though, and perhaps the third too, I wouldn't know. The Germans have a proverb for this. Wer zahlt, schafft an. Liberally translated: Who pays, decides what's paid for.
    - iron_ball 12y ago
      The English proverb would be "who pays the piper picks the tune."
      - Arnt 12y ago
        Very apt. Thanks.
      - mturmon 12y ago
        There is also the debased version of the golden rule. The golden rule being, of course, "Do unto others as you would have them do unto you." The debased version being, "Who has the gold, makes the rules." (http://quoteinvestigator.com/2015/01/11/has-gold/ http://quoteinvestigator.com/2015/01/11/has-gold/) Sometimes in gloomier moments, I am reminded of the gap between the two.
72deluxe 12y ago
Was there ever any plans to sell a DVD of all the content up to the closing date? I'd buy it in a flash.
freyfogle 12y ago
Out of curiosity, why do you believe this became apparent to advertisers now as opposed to previously?
ttctciyf 12y ago
> effectively nobody ever buys anything by clicking on a web ad I know I never did - at least for banner ads and other CPM advertising, but I'm not so sure it applies to the CPA sector. My impression (no pun intended!) is that sector is in a growth phase. On the plus side, if this means the return of advertising revenue to print media, that's an interesting development. If it doesn't, then ... where is the advertising spend going to go? Mobile? I think mobile advertising is even more universally reviled than CPM web advertising! Should the penny be dropping (pun intended) there, as well?
mpdehaan2 12y ago
I had assumed GigaOM's web property was there to lend brand to GigaOM Research, versus the advertising angle. The ability of journalists to make ad revenue is very disappointing and unfortunate across the board, though it can also be said there's a lot of really poorly researched tech journalism out there too. If the goal wasn't a self-sufficient web business, this seems to imply (maybe?) that the "research/analyst bits were also unsuccessful. Which I can also believe, because Tolkein's "Go not to the Elves for counsel" was somewhat written about analysts - "for they shall say both no and yes".
timdierks 12y ago
I believe the issue is less that advertisers are unwilling to buy display web ads; it's more that they no longer place a premium value on buying them from branded publishers when they can reach the same users on many different websites with programmatic buying. This hugely devalues quality publishers and increases the value of lower-investment publishers who successfully create a lot of pageviews. The latter inventory used to sell for bottom-of-the-barrel prices, but advertisers have decided it's pretty similar in value to reaching the same user on a high-quality site. The best offensive weapon quality websites have against this trend is native advertising: create high-quality sponsorship offerings that commodity display ad impressions can't directly compete with.

vonnik 12y ago

Great comment. As part of the marketing team at a well funded but very money-conscious startup, I can confirm this awareness that most web ads have no visible effect on the bottom line, or the cost of customer acquisition is so high as to be prohibitive. On the web, people are overwhelmed with marketing messages. It's very hard to find the right demographic, and then to convince them to act. This has always been true, but it has become much more measurable since the Internet came along. Unless you are a large corporation with the belief that "branding" can be bought, and the budget to back it up, there's no reason to buy online ads in most venues.

rsync 12y ago
Can you (or andrewbinstock) comment with regard to google adwords ? I don't think of those as the same thing as banner ads ...
- Scoundreller 12y ago
  As a (very) small-time publisher, but with a fairly reasonable sample over the years, CPM ads pay about 1/5th what CPC ads do. I think that shows how much "brand awareness" versus "I'm trying to make a sale" advertising is worth. Edit: CPM pays 1/3rd the rate, but CPC ads make up 90% of revenue, which makes sense if they generally pay more. I run a rather diverse set of sites, but I stay away from tech.
- andrewbinstock 12y ago
  You're right they're not the same as banner ads. Alas, I don't enough about their economics to provide an intelligent insight.
- vonnik 12y ago
  We haven't found a way to make Google Adwords work for us. Maybe it can be done in other industries. The key words in ours have been bid way up.
  - wazoox 12y ago
    I concur. Back in 2006-2008, AdWords was incredibly effective for my company, then the leads gradually dried up, and after a while we realized it provided nothing useful anymore, unless you buy incredibly expensive keywords (up to several dollars per click). It may still be effective for pure consumer-oriented services, but is IMO useless nowadays for B2B unless you're a large, deep-pocketed company.
  - rsync 12y ago
    We've had that trouble as well - anything related to offsite backup or cloud storage has outrageous pricing - perhaps $8 or $12 per click (!). The frustrating thing is that if you do find keywords that have low prices, google will refuse to run them for you because too few people search for it. Citing "low quality", google will force you to artificially inflate your CPC just for the privilege of running a niche keyword. There is this idea that every day there are X people on the web searching for exactly what you offer, and if you show them an ad during the search: success. I believe this to be true, but google makes it all but impossible to pursue low traffic, niche searches. They literally refuse to run them.
greggman 12y ago
That's very interesting. Back before the internet was huge I used to subscribe to 3-5 computer magazines. PC Magazine, Wired, ... I don't even remember the other ones, probably mostly video game mags. I used to look forward to the ads just as much as the articles because it was a way to find out about new products. Now though I need no such ads. I see the announcement on the various tech sites or from friends that read the tech sites. Almost zero need or interest in ads anymore and pretty much do my best to ignore them.

michaelbuckbee 12y ago

Andrew, any insight into the prevalence of AdBlockers among your tech savvy audience? Do you feel that was a factor?

andrewbinstock 12y ago
Very hard to say. I tend to doubt it. Even before ad blockers became popular, the number of click throughs was very, very low. What was different then was that vendors viewed Web ads as an expensive form of advertising, but one which they had to do.

chvid 12y ago

With publishers dropping off like this; when will the decreased business show up in Google's revenue? Google being the biggest advertisement broker thru AdSense and similar programmes.

Scoundreller 12y ago
More people are spending more time on the internet on more devices. So far, this has protected Google from decline. Eventually Google will become a blue-chip stock because they can consistently match advertisements to users better than anyone else can.
- chvid 12y ago
  If the publisher's revenue drops due to there being more publishers then Google and similar would be safe but andrewbinstock writes that it is vendors that have lower willingness to pay for online advertisement; they are simply spending less on online advertisement. That should effect Google all things being equal.
nikcub 12y ago
> With publishers dropping off like this; when will the decreased business show up in Google's revenue? Never. Publishers aren't dropping off in sum, just the bad ones are cycling out and are being replaced with more nimble, relevant, cheaper, etc. content providers (ie. Grandparents thesis is not correct and is anecdotal) There are is more and better inventory than ever and more audience than ever and both are growing at staggering rates.
- jsmthrowaway 12y ago
  Nothing is more amusing than a former employee of TechCrunch subtly swiping at the relevance of Dr. Dobb's Journal. Without a doubt, that's the funniest thing I've ever read in this line of work and says everything one would ever need to say about certain elements of the Silicon Valley culture. Your analysis is just plain wrong, by the way. Dr. Dobb's was punished for delivering content. Turns out, advertising doesn't work as advertisers hope on people who actually enjoy content. When you deliver actual content at some point in your career, you will discover this to be true as well.

tzs 12y ago

> The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad There have been a few times I've seen an ad on a website that looked like it was for something I wanted, and wanted to click it. The problem is that I pretty much ignore the ads while I'm reading the page content, and so I only noticed these ads when I'd finished the content and clicked a link to leave the page, and my eyes are wandering while I wait for the new page to start loading. I click back to try to get back to the ad, and something else has taken over its spot. I might refresh a few times to try to get the desired ad back, but that has never worked for me.

Bill_Dimm 12y ago
I've been saying exactly this for quite a while. It is so incredibly stupid to replace the ads when the back button is hit. The probability that I hit the back button to click one of the ads is quite high, and the probability that I'll want to click one of the new ads that replace the one I was trying to get to is virtually zero.
ankitoberoi 12y ago
> There have been a few times I've seen an ad on a website that looked like it was for something I wanted, and wanted to click it. Absolutely. IMO, Banner Blindness alone is the biggest reason why web publishers are facing difficulty in monetising web inventory. Many a times, people don't notice ads even if they were relevant to them, just because of banner blindness. In fact, 3 out of 10 display ads are never seen [1] [1] http://www.adpushup.com/blog/banner-blindness/ http://www.adpushup.com/blog/banner-blindness/ (Disclosure: I wrote this)

mathattack 12y ago

There is a trend towards awareness advertising - I think this is because the Super Bowl is barely more measurable than a bunch of display ads. The amount of $ spent on web and mobile advertising is tiny compared to the time spent there. If branded ads can make it on TV, perhaps that's the future rather than click through.

Scoundreller 12y ago
Absolutely. But awareness advertising doesn't pay as well (yet?). The real money is getting people at the edge of making a purchase to make that purchase, whatever it may be. And the ability for the web (or any advertising, for that matter), is increasingly being called into question (or people are getting better at questioning such purchases).
- mathattack 12y ago
  This is true. If I got a "$100 better than your best competitive offer" ad when I was car shopping, I would have clicked through. There was enough data on my phone to suggest this was the case.

Scoundreller 12y ago

> which is a very steep drop in vendors' willingness to buy Web ads Any relative or absolute numbers you'd like to share? > The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad. My favourite experience with this was when I was selling a computer case and researched its specs on newegg.com. Then for a while all I saw were retargeted ads from newegg trying to sell me that case. Nonono, I didn't have one too few computer cases, I had one too many. I was the complete opposite of their target audience, heh.

whoopdedo 12y ago
You're example is obvious because Newegg can't tell the difference between market research because you're about to buy versus research because you're about to sell. But it's always amused me (in a not very amusing way) that immediately after I purchase something I'm inundated with advertisements from the same vendor trying to sell it to me again. Big data is supposed to be about finding statistical relationships between events, right? In what world would the probability of someone buying something be highest when they're holding a brand new one in their hands? What it really makes me think is the web advertising folks are pulling a con on their clients. They're not actually doing the critical analysis they promise but simply sorting by linear distance in n-dimensional space and hoping no one notices how useless the measurement is.
- Scoundreller 12y ago
  > Newegg can't tell the difference between market research because you're about to buy versus research because you're about to sell I agree. I think it would be very difficult for them to tell the two states apart, but I found it amusing.
  - whoopdedo 12y ago
    Isn't this a market opportunity, though? Make a website that provides product information for people who want to sell an item. Give tips on how to advertise and mail the item. Sell packaging supplies. Why isn't Ebay already doing this?

mikeleeorg 12y ago

And on to of that, Gigaom tried the shift away from ads to subscriptions: Instead, we opted to take the road less traveled — subscription revenues. [1] Which still did not bring in enough revenue. [1] https://gigaom.com/2014/02/20/now-that-gigaom-is-all-grown-up-its-time-for-the-next-chapter/ https://gigaom.com/2014/02/20/now-that-gigaom-is-all-grown-u...

ilamont 12y ago
I had no idea their headcount was 70. It would be hard to maintain such a large staff unless research + events + advertising + other were doing really, really well.
Steko 12y ago
It's not advertising that's the problem as many in the comments seem to think; it's the shitty type of ads these 90s websites were all built around. The recent Marissa Mayer piece in Medium [1] made much of the fact that her big accomplishment so far was transitioning from the old dying Banner ads model to a mobile/video/social/fake content friendly model. Also consider this bit from buzzfeed [2] which I first saw from stratechery's great article [3] on them. The banner ad, whose decline Farhad Manjoo recently celebrated, was also born during this era and created a business model in which clicks are tied directly to dollars — something many people assume is still how all online publishers make their money. But BuzzFeed has never sold a banner, and I couldn't even tell you how many monthly page views we get. And so our business model at least moderates that incentive to drag every last click out of our audience. [1] https://medium.com/backchannel/marissa-mayer-has-completed-step-one-71dc31912855 https://medium.com/backchannel/marissa-mayer-has-completed-s... [2] http://www.buzzfeed.com/bensmith/why-buzzfeed-doesnt-do-clickbait#.giGNn3djZ http://www.buzzfeed.com/bensmith/why-buzzfeed-doesnt-do-clic... [3] http://stratechery.com/2015/buzzfeed-important-news-organization-world/ http://stratechery.com/2015/buzzfeed-important-news-organiza...

nikcub 12y ago

Taking venture capital and starting at -$22M doesn't help. There have been a lot of very successful and profitable media companies[0]. The industry isn't broken (far from it), just some of the models are. This also isn't a new revelation: Arrington wrote a post on TechCrunch in 2008 warning other bloggers not to raise money[1] Re: the effectiveness of advertising. This is a $120B+ annual industry with entire billion-dollar sub-industries involved in measuring its effectiveness and optimizing value. If it didn't work it would have slowed, shrunk and or shut down a long time ago - but rather it is growing insanely each year. Advertisers and the over-qualified engineers working in adtech are not idiots. [0] TechCrunch (disclaimer: worked there, profitable - sold), ReadWriteWeb (profitable - sold), Huffington Post (profitable, sold for $350M+), ProBlogger (profitable), etc. etc. etc. [1] http://techcrunch.com/2008/03/19/more-bloggers-raising-money-here-come-the-politics-and-here-comes-my-rant/ http://techcrunch.com/2008/03/19/more-bloggers-raising-money...

vonnik 12y ago
I'm not sure that all the examples you cite are evidence of very successful and profitable media companies. ReadWriteWeb was acquired by SAY Media for less than $5M and they cut it loose two years later. HuffPo wasn't turning a profit for AOL in 2013, and Tim Armstrong wouldn't say in Dec. 2014 if it was earning a profit, which basically means it's not. In any case, HuffPo's revenue is largely driven by rehashing the original reporting of other outlets, and that is definitely not sustainable journalism. [0]http://techcrunch.com/2014/11/13/say-media-selling-off-readwrite-xojane/ http://techcrunch.com/2014/11/13/say-media-selling-off-readw... [1]http://www.businessinsider.com/aol-huffington-post-profit-2013-12 http://www.businessinsider.com/aol-huffington-post-profit-20... [2]http://www.businessinsider.com/huffington-post-over-200m-revenue-says-tim-armstrong-2014-12 http://www.businessinsider.com/huffington-post-over-200m-rev...
- declan 12y ago
  <nikcub> is certainly right about the dangers of raising venture capital as a media company. Few news organizations generate outsize returns. In terms of companies sold, there's also CNET, which was sold for $1.8B to CBS in 2008. That was after an operating loss of $6M in 1Q 2008.

LiweiZ 12y ago

As a 100% layman, I spent 20 mins thinking about the ad issue. The easiest way out I can find is to have some kind of location-based ad system to increase the degree of connection between a user and the ad content. Is it feasible technically and commercially? I would like to learn more. Thanks.

NKCSS 12y ago
That's already being done; in mobile based on your GPS/cell location and otherwise based on your IP (not very specific, but a general location work pretty well).
- linker3000 12y ago
  Working for a UK-based division where our corporate Internet gateway ingress/egress is in San Jose, things do get confusing - for example, when I browse ebay.co.uk, (in my lunch hour, of course!) without logging in, the postage charges are astronomical as ebay assumes the UK sellers have to ship to California.
- LiweiZ 12y ago
  Yes, I know. But most of the time we see ads on bigger screens. The location-based ads have way less location awareness in my experience. I guess, besides the ads from your neighbours (location aware ads), there should be some kind of quicker balance feedback between ad bidding system and what user really pays attention to. Just think about the ads we see in the paper-media-only age, different ads occupied different places. Online ads have not reached that point yet. I wish we could get to that point earlier to make more quality content makers' life easier sooner.

declan 12y ago

Here are some stats on advertising cost per thousand views (CPMs) from mid-2014, which may be relevant: http://monetizepros.com/blog/2014/average-cpm-rates/ http://monetizepros.com/blog/2014/average-cpm-rates/ Some excerpts: Average CPM for business & finance: $6.15 Average CPM for technology: $4.56 Average CPM for style and beauty: $1.48 So at $4.56 per thousand views, assuming one ad per page, even if an article does 20K views, that's only $91. This is why news organizations look for differentiators; it's what we did when I was at Wired and CNET, though I was on the editorial side, not advertising. Unfortunately not all news organizations succeed; Gigaom did events and had a paid research arm, but that wasn't enough. I'm also still mourning Dr. Dobb's, which I first read as a teenager. :(

diminish 12y ago
I am managing a 7 digit banner ad budget which helps my client generate a profitable 8 digit income in education business. So no display advertising isn't dead for advertisers, because possibilities are more. The problem with Gigaom and DDJ is that they have low capacity with not much relevance advantage. One single programmer can run a web site with tenfold their capacity with a fraction of their cost. In contrast one can claim banner (outdoor, indoor or web) never really worked except for some carefully chosen "success stories", and now advertisers can measure.
- hibbelig 12y ago
  What does "low capacity with not much relevance advantage" mean? My understanding is that DDJ (at least) has great content that "one single programmer" couldn't hope to match.
  - majani 12y ago
    Low capacity means they lack the man power to do fancy custom campaigns( think Vox Media level customization http://www.voxmedia.com/vox-advertising http://www.voxmedia.com/vox-advertising ) Relevance advantage means that a site is so big and important in a broad category that it's worth it for advertisers to pay a premium to get frequent views from its readers( think of how TechCrunch is so central to the tech community)

makeitsuckless 12y ago

I'm sure that is true, but aren't we overlooking the fact that the tech sector has an extreme amount of content to offer compared to any other sector? Plus there's a large amount of content that can be had straight from the source. Wasn't it simply due for a shakeout regardless?

kalleboo 12y ago
> Plus there's a large amount of content that can be had straight from the source? Exactly. How many articles have been written in the past day on the new MacBook that are actually just worse than reading the Apple.com page itself. Filtering can be done by link-sharing sites like HN and Reddit.
- droidist2 12y ago
  Yeah, the echo chamber gets really tiresome.

jacquesm 12y ago

The curse of Dr. Dobbs was simply that the content was so good the ads were not able to compete for relevancy. This is a weird paradox: really good content attracts audiences but crappy content makes them click through on ads (and probably still not purchase anything but at least there is some effect for the ad buyer they can measure beyond 'impressions'). Lots of fond memories of the print edition, that's where I learned a whole bag full of useful tricks when information was a lot harder to come by than today.

Natsu 12y ago
I'm starting to fear that the only publications to survive will be pure clickbait.
- Arnt 12y ago
  Some do well with real content. Economist is well known on HN. But the Economist charges a fee. In .de, SZ, Zeit and Spiegel appear to do tolerably. (I subscribe to the first of the three.) Two of them charge real money, though, and perhaps the third too, I wouldn't know. The Germans have a proverb for this. Wer zahlt, schafft an. Liberally translated: Who pays, decides what's paid for.
  - iron_ball 12y ago
    The English proverb would be "who pays the piper picks the tune."
    - Arnt 12y ago
      Very apt. Thanks.
    - mturmon 12y ago
      There is also the debased version of the golden rule. The golden rule being, of course, "Do unto others as you would have them do unto you." The debased version being, "Who has the gold, makes the rules." (http://quoteinvestigator.com/2015/01/11/has-gold/ http://quoteinvestigator.com/2015/01/11/has-gold/) Sometimes in gloomier moments, I am reminded of the gap between the two.

72deluxe 12y ago

Was there ever any plans to sell a DVD of all the content up to the closing date? I'd buy it in a flash.

freyfogle 12y ago

Out of curiosity, why do you believe this became apparent to advertisers now as opposed to previously?

ttctciyf 12y ago

> effectively nobody ever buys anything by clicking on a web ad I know I never did - at least for banner ads and other CPM advertising, but I'm not so sure it applies to the CPA sector. My impression (no pun intended!) is that sector is in a growth phase. On the plus side, if this means the return of advertising revenue to print media, that's an interesting development. If it doesn't, then ... where is the advertising spend going to go? Mobile? I think mobile advertising is even more universally reviled than CPM web advertising! Should the penny be dropping (pun intended) there, as well?

mpdehaan2 12y ago

I had assumed GigaOM's web property was there to lend brand to GigaOM Research, versus the advertising angle. The ability of journalists to make ad revenue is very disappointing and unfortunate across the board, though it can also be said there's a lot of really poorly researched tech journalism out there too. If the goal wasn't a self-sufficient web business, this seems to imply (maybe?) that the "research/analyst bits were also unsuccessful. Which I can also believe, because Tolkein's "Go not to the Elves for counsel" was somewhat written about analysts - "for they shall say both no and yes".

timdierks 12y ago

I believe the issue is less that advertisers are unwilling to buy display web ads; it's more that they no longer place a premium value on buying them from branded publishers when they can reach the same users on many different websites with programmatic buying. This hugely devalues quality publishers and increases the value of lower-investment publishers who successfully create a lot of pageviews. The latter inventory used to sell for bottom-of-the-barrel prices, but advertisers have decided it's pretty similar in value to reaching the same user on a high-quality site. The best offensive weapon quality websites have against this trend is native advertising: create high-quality sponsorship offerings that commodity display ad impressions can't directly compete with.