Andrew, in fairness this is incorrect. Web advertising on content is no more, nor any less, effective than web advertising in a printed magazine. Rather than ask the question "How many of you have clicked on something and bought it." a more relevant question is "How many of you have bought something, or from someone, you have seen as an advertisement on a web page?" Digikey ads showed up on Dr. Dobbs and I've bought a ton of stuff from them. Sometimes reading an article there, will show an ad, and it will remind me of something I was supposed to get. Then I will go over there and buy it. Almost exactly as I did with the magazine version.
That said, click fraud has really burned a lot of advertisers. That is why advertising on content needs to shift to a performance based model, ads that let you know that someone went to a site after they saw the ad on your page, and bought it. That should net you a few $. As it stands, advertisers bid for 10,000 clicks at a nickel ($500 ad spend) and compare that to what they sell, and they come up poorly. If they set aside $500 to reward the first 100 people who clicked through and bought something you would find things to be very very different. Click fraud doesn't work if the value isn't in the click. But this migration is currently not happening as quickly as we would like.
> Web advertising on content is no more, nor any less, effective than web advertising in a printed magazine.
1) Things like AdSense? You're right. The real money is in sponsored content. Just ask BuzzFeed, Forbes, Huff, etc. There's a saying from advertisers when you confront them about traditional print/broadcast advertising success "when sales go up, it just works, you don't question it".
> That is why advertising on content needs to shift to a performance based model
2) Not all advertising is about direct click through to purchasing. Coca-cola, Pepsi and every car manufacturer in the world spend billions a year on advertising simply for brand recognition alone. No one is buying a coke because they saw an ad on Facebook, but they sure as hell associate drinking a coke with happiness because that brand association is pretty ubiquitous nowadays.
I think the OP is insuitating that they should have never been a $3mil business in the first place, which is consistent with your story about your purchase behavior. How many ChuckMcM's are there gonna be have to be that purchase products on Digikey in order to provide $3mil worth of business?
> How many ChuckMcM's are there gonna be have to be
> that purchase products on Digikey in order to provide
> $3mil worth of business?
In this case we've got the numbers from the article, 10.3 million page views means they need a nearly $300 RPM in order to make $3M a year. So yeah, even Google doesn't make $300 RPMs. I wonder if that is the correct number. When I first read it I read 10M page views a DAY not a YEAR. At 10M page views a day they need an RPM of about $0.82 to make $3M/year.
Where does that leave us? Well wondering things. Alexa says they see about "40k visits/day" so 1.2M a month, (that would be closer to 14M/year). 40K visits a day though and clearing $83K/month (1M annual run rate) is like close to $69 RPM. That is pretty good for a content web site.
It means that if they can keep half the visitors going to a paid model, they need to charge 2 USD a year to make 3M. Not counting what they save on not having to run or sell ads. Who here wouldn't pay quite a lot more than that not jus for Dr. Dobbs - but a much more independent (or obly beholden to its readership) Dr. Dobbs?
There's two types of advertising (probably really more):
1) We don't care where you buy the thing we make, just buy it. (Mazda)
2) You want that thing in #1, come buy that thing from me! (Mazda dealership)
I don't think there's ever been a question of the efficacy of #1, but #2 is probably nearly useless online. Anecdotally, an advertisement might remind me I want something, but it isn't going to change my habits in how/where I buy it. Bob's House of Laptop Batteries could offer me a price that's $2 less than Amazon, but if I see Bob offering the exact battery I need at exactly the moment I need it, there's still a pretty good chance I'll buy it from Amazon because of 1) ease, 2) trust, 3) Prime, etc.
> That said, click fraud has really burned a lot of advertisers.
THIS
> That is why advertising on content needs to shift to a performance based model,
As someone in the ad biz,it's something hard to do.You still need ways to track(I understand people don't like it but...) accurately where the traffic comes from.We really need innovative tools in that domain!
Finally,I think the biggest disappointment in web marketing comes from the (un)ability of social medias to really influence sells.FB and co ad services are way worse than classic web advertising.It's borderline scammy.
analyze what happens. You can compare normal behavior - time on page, number of pages viewed etc occurring from normal organic traffic against traffic generated by the ad campaign. Did one site or group of sites send 90% of your clicks, but almost zero real traffic?
Another thing I've seen happen through Adwords was a large percentage of traffic coming through with default language set to Arabic and spending 0 time on site. (on a site intended for English speakers)
Indeed, magazine readers greatly prefer print ads as their most favorite way to be marketed to (61%, Nov 2014). More than twice the percentage as the #2 way which is trade shows, and way more than annoying banner ads (13%).
And why not> Print ads gently invite you to investigate a product on your own terms. Didn't you all look at the ads in Dobbs and every other special interest magazine? It's universal, still is today.
But since online advertising became more measurable than print, print slowly disappeared. In a nutshell.
Ted Bahr
Founder
SD Times
Last Man Standing (almost)
> That is why advertising on content needs to shift to a performance based model, ads that let you know that someone went to a site after they saw the ad on your page, and bought it.
Is't that what affiliate programmes are?
I must've gone about using them in the wrong way, but I didn't make any more money from then than I did from displaying Adwords.
The problem with performance-based model is that is it simply a slower race to the bottom (of quality). Publishers will continue to find ways to trick people into responding and advertisers now consider a lead to be a lead to be a lead. Lowest common denominator wins. Quality loses.
Example: HuffPost. You consider any of that eye-ball grabbing stuff to be quality? (not making a political statement)
I agree with this point. The purpose of an ad need not always be to make a immediate action (like a purchase or signup), but also about creating awareness and reminding people about a brand and its products. This is what most ads in printed form do anyway. RIP DDJ.
That said, click fraud has really burned a lot of advertisers. That is why advertising on content needs to shift to a performance based model, ads that let you know that someone went to a site after they saw the ad on your page, and bought it. That should net you a few $. As it stands, advertisers bid for 10,000 clicks at a nickel ($500 ad spend) and compare that to what they sell, and they come up poorly. If they set aside $500 to reward the first 100 people who clicked through and bought something you would find things to be very very different. Click fraud doesn't work if the value isn't in the click. But this migration is currently not happening as quickly as we would like.