Advertising on the Net

ADVERTISING ON THE NET….John Quiggin remarks on a downside of the failure of TimesSelect: “The Times decision has been motivated not only by the increasing costs of a closed system but by the increasing returns to advertising….In my experience, growing returns to advertising are being manifested in more, and more obtrusive, ads.”

No kidding. Full page ads, blinking ads, Flash ads, ads that float over text, ads that expand suddenly as you’re reading, audio tracks that turn on if you merely roll your mouse over the wrong spot — Madison Avenue’s options for driving us nuts seem to be endless. But aside from the sheer annoyance factor of all this, there’s yet another downside: advertising may increasingly be the only game in town, as John says, but the annoyance arms race is being driven largely by the decreasing effectiveness of web advertising. Clickthrough rates tend to be pretty abysmal on the internet, and advertisers are desperate for some way to actually grab readers’ attention. But of course there’s only so much they can do. At some point, if I don’t need a new mortgage on my house, I’m just not going to read their mortgage refi ad.

Which is all bad news for the internet. Eventually advertisers are going to figure out that bigger, louder ads don’t accomplish much and their conclusion will be a dismal one: (a) ads are the only source of revenue on the internet, and (b) ads are a pretty meager source of revenue on the internet — and there’s not much to be done about it. A few search engines will do OK, but destination sites are going to be left without any viable revenue model at all. At that point, we will all be dependent on the kindness of strangers. (And Web 2.0 user-generated content.)

But who knows? The day is young and advertisers are nothing if not persistent and clever. Maybe eventually they’ll figure out a way to jack their messages directly into our brainstems despite our best efforts to ignore them. The arms race is young.