Whenever you hear editors decrying the death of newsprint – and the Guardian’s Alan Rusbridger did exactly that this week – there is always someone who points out that online advertising has jumped x percent in the past year and is now worth xx billion.
And the response is always: but that remains only a tiny percentage of overall advertising. The online world is here, it’s coming, but it’s not enough to sustain the system in place.
Well, online advertising may not be fully matured but it not for a lack of energy or innovation.
I’m sat in the chandelier-filled Starlight Ballroom in the Fairmont Miramar Hotel, Santa Monica, attending Domainfest 2010, and on stage are five sages of the online advertising world dissecting a business model idea put to them by an eager young domainer.
As conferences go, Domainfest is a pretty exciting one. It probably has something to do with the average age of the attendee (24?) and that the industry it seeks to cover is a fast-moving, ideas-filled world.
The “PITCHfest” that I’m watching invites five finalists to outline their idea for a new way to do online advertising – and make money from it. One at a time they come up to the podium, make their pitch and then deal with questions and comments from the sages on stage. (For full details on the pitches, see Domain Name Wire’s story.)
It’s a novel structure for a conference – somewhat like Dragon’s Den on TV – and it works, to the extent that you almost forget that every industry, when put closely under a microscope is incredibly dull.
Every industry has its jargon, but the Internet world insists on putting all its jargon into three-letter acronyms (TLAs). “The problem with CPC is the CTR. So what about PPC?” – these terms flow off the tongue so fast that you can miss them and hear new ones – did he say RPC? Did I hear CPR?
The presentations are good though – people who have clearly put a lot of thought and work into complex, advanced and automated systems – all to grab a few cents here and a few cents there. Add it all up and you might start making money.
Here’s a question that I have though: who the hell are these people that are clicking on online ads?
I don’t. I don’t believe I ever have either. Not even the ads on my own site. Admittedly I’m a very bad example. I hate ads. I skip them without seeing them in publications; I wander off in TV ad breaks and use my digital recorder wherever possible to avoid them; I don’t recall huge billboards – even in Los Angeles where they are bigger than buildings.
It seems I’m not alone – one presenter boasts that his new system will get a CTR of 1.5 percent “which is absolutely unheard of”. What that means in plainer English is a click-through-rate of 1.5 percent, or 15 people in every 1,000 people that see an ad click on it.
Maybe the tough part of online ads is that it is possible to get these stats. When it is an ad in a magazine or newspaper, there’s no surefire way to know what impact, if any, they had. It’s not a pretty picture: advertising execs forced to recognise that most people are actually completely uninterested in work. You can even put a figure on it – 1.5 percent. And that’s high.
Of course what people are outlining isn’t rocket science – one guy’s pitch is basically that he makes text ads that look much nicer – but it is a sign that this is an expanding market. The atmosphere is lively, the décor is bright, the people are young and friendly, perhaps a little too geeky.
It is far from the mature market conference where middle-aged men in suits sit on a stage raised six feet above the audience and propound at great boring length to the assembled masses. The irony of course is that it won’t be until that happens that the world of online advertising is strong enough to support the monster publishing houses.