On top of that, as Liz Gannes and Noah Brier note, nobody “goes online” any more: the internet is becoming an ambient background thing-that’s-always-there, rather than a mass communications medium that people consciously think of themselves as paying attention to. When you pick up a magazine, you do so because you want to read it; similarly, when you turn on the TV. But the internet is different: your phone is always just sitting there, and sometimes it beeps at you; your computer is always on your desk at work, and it’s never not online. In a mobile world, the distinction between being online and not being online is an increasingly silly one to draw. And as a result, the idea of using “time spent online” as a useful metric of anything, really, is equally silly.
So if the internet is not going to displace TV as a medium for mass-market brand advertising, might it at least be good at direct marketing? Can publishers not deliver certain readers, in certain demographics, to marketers who want to reach them? To a certain extent, yes. But the fact is that Google and Facebook, between them, are extremely good at delivering as many of those readers as any advertiser could ever want: all that Facebook needs to do is turn a dial, and billions of new impressions get added to the stock of global inventory, targeted at any demographic that any advertiser could want. Google, similarly, owns search, especially mobile search. It’s conceivable that some marketers might prefer to reach an audience some other way — but this is a race to the bottom, with a finite amount of demand chasing an essentially infinite amount of supply. That’s a buyer’s world, where the sellers have no real leverage at all.
Some very large proportion of the websites on the internet have a pretty basic business model: “we will publish great content; millions of people will want to read or view that content; advertisers will want to reach those people; and so we’ll be able to sell our audience to advertisers and make lots of money”. There are people out there who have succeeded with that model, but the number of successes is dwarfed by the number of failures, and the amount of scale you need to even get your foot in any media buyer’s door has been rising dramatically for years. By the time you’ve paid for your content and for your ad-sales infrastructure, the chances that you’ll have any money at all left over for your shareholders are slim indeed, and getting slimmer year by year.
All of which means that smart online publishers are looking beyond advertising, to other forms of generating revenues. But that story will have to wait for part 2.
Way too much of a generalization. We deliver more people to our advertisers *in our neighborhood* than any other medium, whether TV or radio or print or other websites ... because of our market penetration. And the relevance/targeting is incredible, since we only take local ads, and the people they're trying to reach can't be reached anywhere else, in these numbers.
#1 Posted by Tracy @ WSB, CJR on Thu 28 Feb 2013 at 04:13 PM
Only someone completely consumed by their own hubris would argue with the conclusions of a study like this. Internet advertising simply does not work very well and in the case of smaller ads essentially doesn't work at all. "Reaching" people has virtually no effect if they don't then convert into dollars for the advertiser. The truth is that smaller advertisers are most frequently very unsophisticated advertising buyers. They don't have time to be deeply conversant in advertising so they make an expedient decision buying what seems like a worthy idea. But over time, when ads of this type don't prove to be worth what is being charged, they will seek other alternatives. It's inevitable.
#2 Posted by Aaron, CJR on Fri 1 Mar 2013 at 01:58 AM