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Thursday
Apr172008

Study: A Billion Dollars in Internet Advertising is Wasted

AuthorYoung Urban Professional

Advertisers continue to plow a ton of money into Internet advertising, even in the face of an recessionary environment. At the Forbes Online Brand Summit this weekend, Citi projected 20% year over year growth. eMarketer is calling for a 23% increase.

Search remains the big daddy. According to eMakreter it will account for 40% of the $25 billion that marketers will spend online this year. Right behind it at 21% (or $5.1 billion) is display advertising. However, according to a new study, a giant percentage of these ads are wasted because they fall below "the fold"

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The Eyetools/MarketingSherpa eye tracking study, released last week, found that about 60% of web site visitors see the ads that are 100% visible and "above the fold." Below the fold - e.g. the part of a web page where users are required to scroll - the situation is grim. These ads are visible to roughly 70% of web users, but only about 25% actually see those ads.

Let's do some back of the envelope math here. Assuming that all of the above data is accurate and that 50% of display ad impressions fall below the fold (this is a conservative guess - it might be significantly higher) that means that nearly a billion dollars in online advertising - $937M based on these calculations - is below the fold and ignored by 75% of web users.

The situation is actually be a lot worse when you factor in trust. A Nielsen study released late last year found that only 26% of consumers trust banner ads. So even if your display ads are visible and seen, they're not trusted by the vast majority of the public. That aint good news.

The conventional wisdom is that online display ads are good for branding. Well, this appears to be a myth for lots of impressions. Now factor in that they also continue to be a disaster when it comes to direct response.

This is a train wreck waiting to happen. Scoble called it back in 2006. And it further illustrates that marketers are polluting the web.

What this means - especially in this climate - is that at least $1B of what's spent on online advertising is completely wasted and is unsustainable. Advertisers are going to eventually wake up and recognize that unless it's a highly visible placement, banners get you largely nowhere.

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Thursday
Apr102008

links for 2008-04-11

AuthorYoung Urban Professional

Comment3 Comments
Thursday
Apr102008

Twitter Quitter Not Bitter

AuthorYoung Urban Professional

Over on Authenticities, the Edelman Digital weblog, I wrote about Hugh Macleod's abrupt, yet cordial departure from Twitter and whether a mass exodus is brewing. If you're not subscribed I highly recommend it. We're blogging daily. I and I have been posting there weekly. You can get the feed here.

(On an unrelated note, I picked up this great book on how the New York Post writes headlines. I want that job in my next life. The headline on this blog post was my first attempt. Like it?)

Comment10 Comments
Wednesday
Apr092008

An All Too Convenient Truth: Many Marketers Pollute the Web

AuthorYoung Urban Professional

Photo credit: Copenhagen Industry Pollution #1 by Miguel A. Lopes "Migufu"

Earth Day is around the corner and a lot of marketers are thinking about the sustainability of our planet. Some are recognizing that doing good also helps business. Edelman's Good Purpose study found that 73% of consumers are prepared to pay more for environmentally friendly products.

However, it's not just the environment that is endangered by toxins. The atmosphere we breathe online is too is being threatened by pollution - from marketers. The all too convenient truth is that it's very easy for advertisers to pollute the web with their garbage. Most often, that's not their intent. But it's the end result and it's reaching an epidemic proportion. Now business needs to take the same approach online as it has done offline through corporate social responsibility (Jason Calacanis echoed a similar theme recently.)

First let's look at the the obvious ways marketers poison the web. These all intend to game the system ...

  • Spam: 94% of all email is spam (Postini)

  • Splogs: 53% of all blog pings is spam, including 64% of those in English (UMBC)

  • Click Fraud: Increased last year by 15% (Click Forensis)

Still, there's more. In subtle ways marketers are contaminating the Internet without even knowing it by spewing millions of meaningless messages across thousands of sites. This may be contributing to the slow down. They're not adding value to your experience or working to help you meet your goals in a very meaningful way.

Consider these popular techniques ...

  • Banner Ads: A lot of money is going here but click-through rates remain abysmal and their overall branding value is being questioned. Many of them just litter the web and get in the way of what you want to do. Eye-tracking studies in the past have revealed "banner blindness."

  • Social Network Advertising: eMarketer predicts advertising on social networks will reach $2.2 billion this year. However, traditional display approaches to date have not performed. As Ian Schaffer from from Deep Focus noted, marketers need to dig in and figure out how to make the experience better. This means what does work is creating authentic content, widgets/applications and more that people pull because they add value to the community. (Note: MySpace, a major social network, is an Edelman client.)

  • Social Media Optimization: This needs to be watched like a hawk. As I have said before, if you participate and add value you are rewarded with Google Juice - and so much more. If you just set up sites and spam social nets to get links, then I am sorry, you're bad.

Despite all the money that's flowing online, most marketers completely miss the boat on what the web really can do for them. As I have talked about before, the Internet isn't just a communications medium. It works best when it's used as a platform for open collaboration. This means taking a PR-centric approach.

This means companies and consumers need to partner toward shared outcomes. This can be as simple as "we want to be entertained" to "we want to find the best world-changing idea." The latter is what American Express will unleash again later this year with its Members Project.

The web is facing it's own global warming crisis as marketers continue to pollute it. Consumers are voting with their clicks and eyeballs by engaging with authentic content that adds value, while ignoring the rest. That's good news that shows maybe we'll solve this crisis, even as business continues to tackle the larger issues that impact our planet.

Later:: Bryan Person asks if clueless PR pitches are part of the problem. Heck ya.

Comment10 Comments
Sunday
Apr062008

links for 2008-04-07

AuthorYoung Urban Professional

Comment1 Comment
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