Marketing 101: On Advertising, Part 2

The argument goes something like this: web-based advertising is a relatively inexpensive way to reach a targeted audience. While a few years ago, “catch all” banner ads were all the rage, now small companies can advertise to niche demographics via banners, flash animations, flash games, iframe ads and text-based Google AdWords, among other things. Since these ads are targeted and they’re eye-catching, and since companies like Google are making billions of dollars off them, they must be effective, right? And since these ads take users directly to the websites they’re advertising for, they must also increase sales by convincing consumers to impulse buy.

This argument contains three obvious flaws. First, it assumes that because advertising exists online, that it must be effective. Second, it assumes that since the companies that sell the advertising are making money, that the advertisers are likewise making money. Third, it assumes that click-thrus result in purchases. Note that none of these assumptions can assume that web-based advertising results in higher sales for a company that it might achieve without advertising. The reason that assumption cannot be made is the same reason that I brought up in my earlier article — there is no consistent, proven correlation between sales and advertising.

One of the reasons that so many people are spending so much money on web-based advertising is because the model sounds productive. Basically, advertising is sold one of the following ways:

1) By time period (e.g. “$500 for one month’s placement on the front page.”) This is usually done in months or quarters, depending upon the site. Some even do it by weeks.

2) By CPM (e.g. “$40 CPM”), which means “cost per mille,” or “cost per thousands.” Usually, this is prepaid, and the ad is yanked automatically once the payment is used up.

Two web-based variations on this are called CPI, which means “cost per impressions,” and CPC, which means “cost per clicks.” Some advertisers sell space based on a ratio of CPI and CPC, where you get charged a small amount for each impression and a larger amount for a click-thru. Others only charge you if you receive a click.

3) By category, or word (e.g. “$100 per week for the word “seanjordan’”). This is becoming one of the most popular ways to advertise; advertisers bid on phrases and keywords that they think users might search for or seek out, and then the advertising network responds by returning their ads along with the content.

There’s no question in my mind that all three systems are effective ways of delivering advertising. What I question is that the advertising that they do deliver actually works. Let me offer an example.

A comic book company I worked for decided to do some banner advertising on a well known comic book website. The company set up a good rate, and the contract allowed the company banner ad placement that could be changed as frequently as the company liked within the six month period. So, the company decided to change the ad every month to reflect the latest products. The ads were animated and looked great; everyone at the company, myself included, was excited about the campaign.

The banner started running and… nothing happened. Our traffic didn’t increase in any unusual way, and awareness of our products didn’t seem to increase. The click-thrus on the banner ad were pitiful; less than 2% of the people who saw the banner actually clicked on it and visited our site. The ad was essentially worthless, and it was our fault, because we had failed to realize one thing: the banner, which ran along the top of the page, was easily ignored by readers as they scrolled down to read the site’s content. The website where we were running the ad, after all, was a news site; it was only natural for readers to immediately scroll down as they skimmed the day’s headlines and to completely miss the ad banner in the process.

We wanted readers to view our banner and be so wowed by what they saw that they forgot why they’d visited the site and would visit our page instead. It was a ridiculous and naive thing to expect, because we all knew, from being Internet readers ourselves, that people don’t read web pages that way. The first thing a reader does when he or she visits a news site is to look at the middle and bottom of the page, where the content lies — not the top, where the logo, site map and ad banner are typically placed. The next thing the reader does is to scroll down to see what else is new, making that top-placed ad banner vanish before it can even be processed. Top-placed ad banners are placed in the least effective spot on the page, and we were idiots not to realize that before we locked into a contract and started shoveling money into the wishing well of advertising.

And we’re not the only ones who noticed this problem — many websites now run advertising next to the content so that it doesn’t get lost in the shuffle. Some even incorporate advertising into the text, either by using some sort of hot linking program that picks out key words and offers links to outside sites paying for the privilege, or by putting square banners in around the third or fourth paragraph so that they must be scrolled over to continue reading the story.

But readers are remarkably stubborn, and most still manage to ignore the advertising as they scroll down the page. So, the ads have gotten accordingly more annoying. The website “LowerMyBills.Com,” for example, is constantly changing up its banner ads to show silhouettes, clowns, space aliens, and office workers dancing in the hopes that the motion will attract the eye. Other advertisers use gimmicks like hot girls, full motion video, interactive minigames, flashing words, ridiculously easy trivia, or irritating sound clips announcing that the reader is a winner of an iPhone, all in the hopes of getting the reader’s attention long enough to possibly get a click-thru.

These are not proof that Internet advertising works, as some will claim. In fact, they’re evidence of the opposite — that Internet advertising is so ineffective that it’s ridiculously cheap, allowing bottom feeder companies to buy up ad space in bulk and pester the rest of the world with their irritating ads. These companies prey upon casual users, and even if they only get 10% of readers to click-thru, it winds up being a lot of people since the ads are everywhere and millions of people are now online.

As for all of these “advertising gurus” who claim to be making a zillion dollars off systems like DoubleClick or Google AdWords, there are plenty of articles out there explaining how they’re doing it. Basically, these people are exploiting the system, developing programs or hiring others to click through ads placed on dummy websites all day, often at great expense to the advertisers. There are stories of advertisers spending their entire budget in one day on Google Ads because scam artists repeatedly clicked through their ads to get referral revenues. Those advertisers spent thousands of dollars to get nothing for their trouble aside from a sizable headache. Worse yet, Google has basically refused to solve the problem, saying that it’s the advertisers’ cost of doing business!

So, with all of this in mind, is Internet advertising useful for small publishers?

Absolutely not! With all of the options out there for free promotion, there is no reason any publisher should be throwing money into the well. Even the specialty sites, who might seem like a good investment on the surface, are generally a wasted effort in the long run since readers have “banner blindness.”

If you want to spend money on Internet advertising, let me suggest this alternative: work on your website instead. Then use some of the promotional tips I’ve offered. If you want to include the specialty media, send them review copies of your books. Not only will those last longer, they’ll eventually appear in the search engine results whenever someone searches for your book, adding more credibility to your product. That’s a lot better value than you’ll get with some adwords or a flashing banner.

And if you feel absolutely compelled to get a banner out there, see if you can arrange a banner or link exchange with some related sites instead. Many specialty sites are happy to provide a link to your page if you provide a link to theirs, since this increases their Google PageRank and broadens awareness of their site. And, best of all, it gives you the perceived benefits of Internet advertising without any of the costs!

By the way, I’m always open to challenges, so if you want to send me your opinions on why advertising is worthwhile, I’m all ears — just post them in the comments section, and I’ll offer rebuttals for the arguments I find worthy. And if you, like me, have decided advertising is a waste of money for a small publisher, I’d love to hear from you too!

Writing Scraps

by Sean J. Jordan