Two viewpoints on advertising online

For the past week, I have been attending the Web 2.0 Expo in San Francisco. I sat through a handful of sessions related to online advertising, none of which came from the perspective of the journalism industry. It seems making money online is an issue for more than just news companies.

I find this area especially interesting because let’s face it, lack of online advertising dollars seems to be one of the chief issues affecting most print news publications.

While no one has a definitive solution to this quandary, there were lots of fascinating perspectives from some of the panels, and I thought I would share two of the better ones here.

1) The modality of online ad experiences

I attended a panel discussion on monetization of the real-time Web (referring to sites that have streams of content like Twitter). The discussion mostly centered around how to display advertisements in a stream of content without disrupting the user’s experience.

Ads tend to pull people out of the experience of consuming content and unless people are accustom to being pulled out of an experience, like TV commercials or movie previews, they usually don’t appreciate it. There was a lot of emphasis on creating “good ad experiences” and gaining the trust of users.

I thought, ‘yeah, that makes sense.’ Create valuable ads experiences so they don’t hamper the overall experience of the site. This is especially difficult to do with display advertising, because ads essentially compete with the attention of the main content. TV doesn’t suffer from this problem as much, because it is a more linear experience, and people are used to it. I made a few graphics to illustrate these concepts:

graphic showing tv as a linear approach

TV advertising is a linear experience.

Physical newspapers and magazines are quasi-linear because people will generally flip through them, and there is (usually) a starting and ending point. There is a premium on full-page ads because users will often see them. You can’t ignore ignore a full-page ad without getting to the next page.

Graphic showing route of attention for print publications

Attention is more scattered with print publications.

Attention on the Web is all over the place. In an attempt to mimic the full page ad, there are some tricks to getting people to look at an advertisement before they come into the main content of a webpage, but these ads are mostly annoying and create a bad user experiences.

Graphic showing attention route when viewing ads on the Web.

Web ads compete with a user's attention (and often lose.)

But even if one is successful with ad placement, there are so many other factors to creating a good ad experience.

One of the factors the panel spoke about regarded the content that the ad is married to. The moderator of the panel was Brad Stone from the New York Times and at one point he did allude to the news industry. One of the panelists said point blank that news is incredibly difficult to monetize. Its content is unpredictable from day to day. Toyota doesn’t want an ad running next to an article about its cars failing. And let’s face it, content in our industry is usually bad news.

2) All of this is moot, it’s about how you sell the ad

Another session I attended was how to build an ad-supported network around a community, hosted by Chris Tolles of Topix. This was a great session because Chris actually worked in ad sales and he knows a thing or two about what goes on inside an advertiser’s mind.

Without explicitly saying it, Tolles said all of this stuff – the metrics, the click-throughs, placement – is really nothing compared to how you sell the ad to the advertiser. One figure he showed was that 20 percent of Topix’s ad staff sold 80 percent of its ads. It had more to do with who had connections at the big ad agencies and if they could sell them on the idea that companies would get a good return by advertising on their site.

“Get your story straight. Tell them a story of who you are going after, and why… Sell to people you know and repeat…”

Advertisers, he said, don’t  just want lots of volume. A million eyeballs is meaningless if it is not the right million. Advertisers want niche products and verticals with really specific demographics. Rolex only wants to advertise in places where it knows its customer’s will see it. So does Lexus, Ford trucks, Wal-Mart, and Gap. Can you think of an audience for each of these products? Advertisers sure can, and they have data to support it.

Tolles was also against the idea of CPMs, or at least in when you’re a small publication. Sponsorships or selling monthly ad plans are much more valuable, unless you’re Google and have billions of people going through your site.

Some sites go after volume with no focus – and some succeed – but they have to have a very large audience. If you have focus, it is much more valuable in the long run.