Is online advertising facing its demise?

“What was once digital advertising’s dirty little secret is now its big, ugly problem. Online ad performance figures are dismal…” Adweek, 8/24/11

I think the Ad Contrarian occassionally makes really good insights (all negative of course) into the world of digital communication.  This extract is one of his best.  Thanks to Will Atkinson for furnishing me with it…

Just when you thought banner ads couldn’t get any less effective, oops, click-through rates dropped another 10% last year.

Mashable reports that a Google study, seen as the “the industry standard” reported recently that click-through rates dropped from .1% to .09% in 2010. That means that CTRs dropped from 1 in a thousand to 9 in ten thousand.

So, Mr. Online Advertiser, for every 10,000 times your online ad appeared, you got a solid 9 clicks. Good job.

If you were a shortstop, you’d be batting .0009 

Oh, and by the way, the 9 people who clicked are no more likely to buy your product than the 9,991 people who didn’t.

“A click means nothing, earns no revenue and creates no brand equity.” says Starcom USA SVP/Director, Research & Analytics John Lowell.

Which, I’m afraid, is not a terribly encouraging statement about the value of “interactivity.” 

Meanwhile, undeterred, the advertising industry continues selling clients more and more display ads. In June, eMarketer doubled its projection for online ad spending in 2011. 

You may be asking yourself how display ads — with such “dismal” performance — can continue to provide large income to online publishers? This, my friend, may go down as one of the greatcon sales jobs in advertising history. The logic, again from Mashable, goes like this:

“…banners work like most advertising, which is to say in a fairly complex manner.

For instance, click-through is actually a poor measure of performance. It’s impossible to click through a billboard ad, for example, but that doesn’t mean it’s not effective…

The same is true for TV ads…”

Oh, I see. The now famous “nobody ever clicked on a TV spot” defense. 

So here’s what has really happened. Online ad hustlers experts told us that banner ads were much more effective than traditional advertising because they were so “measurable” and “interactive.” Then the facts started rolling in and they shit their pants refined their message. 

Now the story goes like this: Banner ads really aren’t any more measurable or interactive than traditional advertising. In fact, the erstwhile key metric — the click — don’t mean shit. Now, we are told, banner ads work just like traditional advertising, in a “fairly complex” manner. 

The only trouble with this baloney new story is that you have to be both blind and delusional to believe that some invisible ad on your Facebook page is as conspicuous as a TV spot or a billboard. In fact, while your average TV spot or billboard is an annoying, intrusive pain in the ass, nobody ever complains about Facebook ads. Which is just another way of saying nobody notices the darn things.

It seems that the worse online advertising performs the more of it we can sell. C’mon gang, if we can just get the click-through rate down to zero, we’ll all be rich

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