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ADOI ONLINE EDITION
Is Advertising failing on the Internet? PDF Print E-mail
(6 votes, average: 5.00 out of 5)
By Mike Fromowitz

Eric Clemons, Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania argues that the Internet shatters all forms of advertising.  “The problem.” he says, “is not the medium, the problem is the message, and the fact that it is not trusted, not wanted, and not needed.”

For advertising agency executives, this might be a subject of considerable disagreement. However, his research indicates that many ads in traditional media have failed. One newspaper after another is going out of business across the United States, and the ad revenues of traditional print media, even of highly respected magazines, is declining. The ultimate failure of broadcast media advertising is likewise becoming clear.
With the economy in serious decline in many parts of the world, an expected drop in Internet advertising revenues this year was neither unpredictable nor unpredicted. Yet Internet advertising’s decline wasn’t caused solely by the general recession and the decline in retail sales.  Clemons argues that Internet advertising will rapidly lose its value and its impact. This he says is due to the simple fact that traditional advertising simply cannot be carried over to the Internet, replacing full-page ads in newspapers or magazines, or 30-second TV spots with pop-ups, banners, and click-throughs on side bars. 

An ad message that is pushed at a potential customer without their approval to view it,  or when the consumer is in the midst of something else on the net, is a revenue recipe sure to fail for most Internet sites.
Most people would agree that the Internet is the most liberating of all mass media developed to date.  It is participatory, like swapping stories around a campfire or attending a renaissance fair.  It is not meant solely to push content, in one direction, to a captive audience, the way traditional television does.  It provides a great array of entertainment and information, on any subject, on demand.  It is the best and the most trusted source of commercial product information on cost, selection, availability, and suitability, using community content, professional reviews and peer reviews.

The Internet will not replace advertising. It will shatter it.
Clemons argues the Internet is not replacing advertising but shattering or fragmenting it.
Traditional advertising is using sponsored commercial messages to build a brand and paying to locate these messages where they will be observed by potential customers performing other activities. These messages describe a product or service, its price or fundamental attributes, where it can be found, its explicit advantages, or the implicit benefits from its use.
It’s not that we no longer need information to initiate or to complete a transaction; rather, we will no longer need advertising to obtain that information.  We will obtain this information from other sources and venues. We will see the information we want, when we want it, from sources that we trust more than paid advertising.  We will find out what we need to know, when we want to make a commercial transaction of any kind.  We will use information that we trust, obtained at the time that we want to see it.
Better targeting of ads using individual interests and individual behaviours will ensure that we do not bore or annoy as many people with each ad, but cannot address the trust issue.

Why online advertising cannot deliver all that is asked of it.  
The digital folks are certain to choke on what Clemons predicts will happen to online advertising. He believes online advertising is going to be smaller, not larger, than it is today.  He thinks that it cannot support all the applications and all the content we want on the internet.
Online he says, is not the answer. There are three problems with advertising in any form, whether broadcast or online:
People don’t trust advertising. More consumers today, are distrustful of ads and messages attributed to a commercial source. For the naysayers amongst you, there is a vast amount of literature written about this subject. They can’t be all wrong?  Forrester Research has completed studies that show advertising and company sponsored blogs are the least-trusted source of information on products and services, while recommendations from friends and online reviews from customers are the highest.

People don’t want to view advertising. Think about your own behaviour, your own channel surfing and fast forwarding and the timing of when you leave the TV to get a snack. Is it during the content or the commercials? Remember too, that the commercials on all the TV channels are as closely synchronised as possible.  Why?  If TV executives believed we all wanted to see the ads they would be staggered, so that users could channel surf to view the ads. Instead ads are synchronised so that users cannot channel surf to avoid the ads.
People don’t need advertising. There is a vast amount of trusted content on the net.  Again, there is literature on this but think about how you form your opinion of a product. Is it from online ads or online reviews? And research suggests that consumers behave as if they get much of their information about product offerings from the internet through independent professional rating sites.

It is true that marketers and their ad agencies have noted that we are not watching traditional ads as much as we use to. And they attribute this to the fact that we have moved beyond newspapers, magazines, outdoor, television, and movies, to video games, iPods, iPhones, and the internet.  Porting ads to a new medium will not solve the three problems noted above.  The problem is not the medium, the problem is the message, and the fact that it is not trusted, not wanted, and not needed.

What digital agencies don’t tell their clients.
Advertising doesn’t work on the web.
If, as research reveals, only the top 0.01% of websites can generate sufficient revenues from advertising thus advertising is almost irrelevant for the success of the Web.
There’s an old adage that says “Half my advertising dollars are wasted - I just don’t know which half!” With the Web, we do know, since you can track how many site visitors come from which ads. As a matter of fact, you can track the users and turn some of them into paying customers. However, only loyal users have any lasting value. Marketers who pay for typical eyeball measures like CPM, are throwing money away.
Web advertising should be valued in terms of the value of the business it creates from the new users it attracts to your site. This value is usually very small, which is why Web advertising works poorly and (while not completely useless) will be one of the smallest contributors to the future of the Web.

With all the hype of click-through advertising, the simple fact is that 99% of the people seeing an ad don’t even bother clicking on it. It is amazing how little most Web ads work at attracting clicks.  
On the other end is the landing page. Most often, these pages are highly disappointing and cause the user to back out immediately. This is another reason why click-through offers poor value.
The Web is very different from television. It is mainly a cognitive, knowledge-driven medium, whereas TV is mainly an emotional medium. This makes TV much more suited for the traditional type of advertising. Today, the advertiser’s job is to keep the user’s hand off the remote control. As long as the user watches, you can keep them engaged by high production values and a message that says very little besides “we are good.”
Where TV is warm, the Web is cold. The Web is a user-driven experience engaged in determining where to go next. The user is usually on the Web for a purpose and is not likely to be distracted by an advertisement. People are now blind to banner ads. Besides, most web pages are stagnant, with very little movement. This again makes the Web less suited for purely emotional advertising. The user is not on the Web to “get an experience” but to get something done.

On the Web, there is no way of trapping users in an ad if they don’t want it. Traditional advertising formats fail on the web because people have no patience for them, as they did in traditional media, where they were habituated to looking at print ads or watching TV commercials.  If that’s not all, today’s savvy web user has ad blocking enabled in his or her browser. When people go online they know what they want and where to find it.
This makes them very resistant to highlighted promotions or other editorial choices that try to distract them. People want sites to get to the point; they have very little patience.
Take those people who browse videos on YouTube. They go there because they know that YouTube is the killer application. Want to find video content? Search for it on YouTube.  Why do you think Google acquired it?
Malaysia’s current slow download time works against emotional advertising. A pure branding message may work when embedded in the high production values of a TV commercial that can be viewed without any delay and without any action on the user’s part. On the Web, everything is slow, and people don’t like waiting for a fancy brand message.

Let’s not forget Social networks here. They have also hit hard against the online advertising wall.  “I’m trying to talk to my friends and you’re showing me ads — get out of the way”.
Is it any surprise that most ad spending still happens offline?

What works on the Web?
There are many ways in which the Web can be used fruitfully in marketing. Most important are corporate websites where an entire site can be devoted to promote a company’s products. If you are a marketer, remember, your site should not be sales-driven but should focus on customer support and service. This should include detailed product specs and supporting information to push the buying process along. In other words, your site should help customers to buy. Don’t push them through a hard sell.
A survey of people who had actually bought things on the Web discovered that only 12% of buying customers had arrived at the website from an advertisement.  88% of the shoppers had navigated there in other ways. Search engines and links are the most important mechanisms. If you offer content-rich pages, other sites will link to you. You can encourage linking by including appropriate URLs in your press releases, print ads and other PR efforts.

Online advertising must create value for users or it will create little or no value for the marketer/advertiser’s bottom line. This would seem self-evident, but it has not been the case with traditional advertising, which was developed for captive audiences, and web users are increasingly anything but captive.
Personally, I think the future of online advertising will involve the old school method of clever product placement. The “editorial” won’t be about the product, but the product will exist within the editorial. The future of modern online advertising is integrating product placement with high quality content.

Advertising Poem

When the client moans and sighs
Make his logo twice the size.
When the client’s hopping mad,
Put his picture in the ad.
If he still should prove refractory
Add a picture of his factory