Q: Is revenue from online display advertising a dead end for bloggers?
by Stan Faryna
Ron Elwell, CEO of Swoop, an online ad platform, says that engagement has been declining over the last decade.
Engagement rates with display ads are now below .09%.
Elwell means that people are not clicking on banner ads and other display ads like they used to do. In fact, 0.9 percent is a high ball park. Exclude porn, dating, give-aways, and contests, .02% CTR (click through rate) may be the real high ball park.
Low CTR is a challenge that publishers (ad networks and web properties) and advertisers have been struggling to overcome for almost a decade. Elwell doesn’t mention the long road of hope that the onlline ad industry has already walked.
Of course, Publishers and advertisers have long enjoyed the infinite hype and glamour of the intertubes over the last decade. Online advertisers created boundless online presence. Publishers grew, boundlessly.
I believe that the online ad industry took a wrong turn when it trapped the banner ad into unengaging sizes and formats at the top and side bar – not to mention how they put all their think and enthusiasm into clicks and targeting.
Yes, clicks are more interesting than impressions. Of course, clicks is where the money is for publishers – the price for clicks commands a premium when it has always been obvious that the price for impressions had an unfortunate and inevitable destination: $.01 per 1000 impressions.
But they put the banner ad in an untenable position. Where a banner sits on a page and how it sits (size, context, etc.) made it as irrelevant as the irrelevance of the clicks and payoff for all.
Bloggers hoping to build an audience of 1,000,000+ in part so that they eat, pay bills, and keep on keeping on should understand that even if they hit the big numbers and get an ad network signed on, they can only expect ever diminishing returns from an industry that is being shaken.
On the other hand, ad networks have failed to define creative solutions where they can work with the long tail of bloggers (1,000 readers/subscribers per month to 100,000) to improve the contextual platform of the ads they serve and the relevance of those ads to online communities.
Elwell and the others don’t see this.
That’s something that bloggers are going to have to envision and, together, bloggers are going to have to present rich contextual solutions to a reluctant and scornful online advertising industry.
This is an opportunity, bloggers. Don’t let the awesome slip through your fingers.
06 March 2012
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