The problem with advertising

The problem with advertising is that the customers will always be the advertisers and they will always want value for their ad spend and value typically comes from compromising the viewer’s experience.

Countless well-meaning, tasteful, and respectable people have taken a swing at making friendly advertising that is both respectful of the viewer and valuable to the advertiser. The problem is that it very rarely works out in the long run because well-meaning, tasteful, and respectable people really do not like “the business” advertising. And viewer-friendly advertising is often of very little to no value to the advertiser.

The business of advertising is a numbers game. When well-meaning, tasteful, and respectable people start out trying to change the world of advertising they typically look at those numbers as they should – they look at them as people. People that don’t want to be swindled or bothered or nagged. People that are at the current web page they are viewing because they really like the blog post they are reading, the newspaper column they are reading, or the video they are watching. People that actually do not like advertising.

So the well-meaning, tasteful, and respectable people say to themselves “I’m one of those people. I don’t like ads. But people that write blogs for free and want to do it full-time need to make money somehow so let’s make a great ad network that sells unobtrusive advertising that people will love.”

Noble. But this business plan isn’t based in reality. This plan can only work if the ad network’s brand is as strong as the brand of the sites in its network. And even then it is questionable whether or not the network can sustain advertiser value longterm. The Deck seems to have success in this area because simply being an advertiser on The Deck comes with some credence. But in my experience this is the exception.

Once the initial novelty of the idea for a viewer-friendly ad network wears off everything comes down to the pageviews and the click-throughs. If the click-throughs are high the pageviews can be lower. If the pageviews are high – and they usually have to be very, very high – the click-throughs can sometimes be not as important since advertisers will typically hope to make up for them with brand recognition of some kind.

And then there is the repeat advertiser problem. If an ad network can bring in brand new advertisers every few months then they needn’t worry about having repeat advertisers. So they needn’t deliver on value. “Your campaign wasn’t all that great but thanks for trying.” And then they simply move onto the next company with $5,000 to spend. The problem is eventually the black books of the individuals running the network will run out of companies to call. Then they have to deliver. Every single month.

Viewer-friendly advertising can work in smaller numbers and with direct relationships with advertisers. However, once an entire “network” of brands are involved it slowly will move away from the relationship between website and brand and move towards the numbers.

Ad dollars will always move towards the latest and greatest thing. The thing the kids love. So newer ad networks with novel ideas on how to do advertising will all typically start off pretty well. Any company with a decent advertising budget will take a crack at whatever the latest fad is. Make no mistake, the same people that will buy your 120×120 pixel well-designed, well-meaning, tasteful, and respectable ad will buy a pop-under ad. They don’t really care about your high-brow morals in the world of advertising. They will go to where the value is. And when your network doesn’t produce value for them in a certain amount of time they’ll stop buying your inventory. Simple.

Patrick Dryburgh nails it in his post about leaving FusionAds:

I hold nothing against the guys running Fusion now. They’re in a tough business, and need to produce page views and sell those page views and then produce and sell some more. So, I get why they need to take money from companies or sign on publishers I don’t think represent the initial vision.

Fusion Ads has to compromise because in the world of advertising there is money in compromising. The more you’re willing to let go of the viewer as the customer and the more you’re willing to give up their experience the more money you’ll make.

Several times in my life where I’ve made the bulk of my income on advertising. Each time I always thought there was a new and better way to do it. A way that didn’t feel so icky. A way to make the viewer and advertiser the customer. It simply isn’t possible. If you’re thinking about starting an ad network of some kind I’d strongly suggest you reconsider.