Thursday, July 07, 2005

Look Ma No Ads!

tags: ads, advertising, adblocker, coupon

A brief history of consumer behavior:
Spam got annoying, consumers got spam filters
TV commercials got annoying, consumers got TiVo to skip commercials
Internet pop-ups got annoying, consumers got pop-up blockers
Now, Internet ads are annoying, consumers are getting ad blocking software

Do you see a pattern? I think there’s a message here. Unfortunately, we consumers often overreact and throw the baby out with the bathwater. I’m sure there are TV commercials that would interest me. My spam filter catches real emails and offers that might interest me. Some pop-ups add value, but they too are caught by pop-up blockers. But once my annoyance level gets too high, these inconveniences become a small price to pay for my sanity.

In the 1970’s consumers viewed 500 ads in an average day, that number is now over 3,000 ads a day. With my surfing habits I would say my screen sees probably twice that number. I say my screen, because advertisers have trained me to ignore ads. And that points to a real problem that is brewing for the Internet. Advertisers, through their behavior, are training users to ignore ads.

What Internet surfer hasn’t been duped into clicking a banner, often disguised as a shooting game, only to be barraged by one banner after another? Or maybe the advertiser infects us with adware or spyware, the gifts that keep on giving. That negative reinforcement does wonders for training people NOT to click on ads. Hell, negative reinforcement works on dogs, what makes you think you can pull one over on people?

So how do advertisers respond? They make their ads flash like multi-colored strobe lights. I guess these advertisers aren’t targeting the epileptic demographic (strobe lights set off epileptic seizures). So, I hit the stop button on my browser to stop the pulsating fluorescent strobe effect. Advertisers learn from this and modify their strobe-ads so that they are impervious to the stop button.

These rogue advertisers live by the motto: carpe diem. They don’t care about the long-term effects this consumer harassment has on their industry as long as they deliver a tenth of a percent higher click through rate (CTR) than the other guy.

The result is simple. Consumers are being trained to ignore ads, or anything that even smells like an ad. And there are plenty of technologies out there to help us. One is AdBlock, a nice little plug-in for Firefox. It allows you to kill ads on webpages, but takes it one step further. It blocks all future ads from that same ad server.

So what is my message to advertisers?
Create ads that add value, and serve them in context to ensure that they add value.

Google’s AdWords and Yahoo’s Overture services provide fairly innocuous text ads and embed them into search results matching the context of the search. This is acceptable, to me. In fact, sometimes it is the only way for an innovative company to get attention/traffic in order to build their organic search rank.

But you know what. Although these ads are more subtle they too are training people not to click on them. Additionally, they might be the baby that is thrown out with the bathwater. I haven’t seen any studies on this, but I would bet that as consumers become more web savvy, their personal CTR drops over time, even for these contextually relevant ads.

So what are advertisers to do? TV advertisers are inserting ads in the context of the shows. Look at the sodas TV characters drink, look at the computers they use. This is called product placement, and it’s big business and getting bigger.

Another approach is to truly deliver value. In case you haven’t noticed, the Internet is one big value shopping bazaar. Look at eBay, Craigslist, the recent acquisition of and Shopzilla for more than $1B combined. It’s simple: help people save money and they will beat a hyperlinked path to your door. I may be biased, OK I am biased, but I believe that coupons will become all the rage in Internet advertising. I’m talking about real coupons that achieve the advertising companies’ business objectives (see my previous post on this topic).

The bottom line is ads either need to hide in the content, like product placement, or even better they need to deliver value, real value, like coupons. Otherwise the constant effort to push the envelope, in order to build short-term CTR will bite you and your industry in the butt!