My friends Duncan Riley and Louis Gray have recently both posted on something they’re terming the Ad “Apocalypse” for the blogosphere. It’s very reminiscent of the sort of memes that Steve Rubel used to start last year that were generally accompanied by the tags “skunk drunk” and pictures of that Kool-Aid guy.
I’m going to start by addressing some key points in Louis’s post, and then work backwards to Duncan, as Duncan seemed to be more reporting what was going on with the Inquisitr, whereas Louis was trying to paint a broader picture of doom and gloom consistent with his worldview of blogging not necessarily containing anything of value (in terms of ad dollars, at least).
Web Advertising 101
To understand what I mean, you should probably read his April post entitled “Most Bloggers Don’t Deserve Any Ad Revenue,” where he devotes an entire section of the post under the heading “Services Offer Real Value, Bloggers Don’t”:
Sometimes bloggers on the periphery of an industry get jealousy over seeing the dollars thrown around from mergers and acquisitions, or funding. It is human nature to see when a service might be bought for millions, that fans of the service or bloggers covering it feel they are entitled to a “share”. But Web services like Facebook, Digg, or TechMeme are in themselves destination sites that are sticky, pulling in consistent viewers and repeat visits, made even better when these sites have personal, demographic information that helps tailor ads and messaging. These Web services are adding real value to the Web by changing the way we interact and communicate. Bloggers, myself included, are not. We are more like consumers than producers in this case, and the last time I checked, consumers pay, they don’t get paid, no matter how excited we might be about a product.
Of course, if you step back and think in rational terms, any page on the vast expanse of the Intertubes where significant attention is given, be it a page hosting an App, or it be a page hosting a blog post, there usually can and should be an ad. If the traffic to that page, the engagement of the audience viewing that page, or the value of that content or app on that page is sufficiently great, the ad value should reflect that.
This is the nature of the web, just as it has been the nature of all commercial content that’s preceded it. TV, radio, and newspaper has always functioned on these principals.
It is true that most content is nowhere near as valuable of real estate as newspapers were ten or twenty years ago. Opinions are plentiful, everywhere you look. Still, the blogosphere, much like the web app space, is a meritocracy. Those really great bits of content can and generally do rise to the top, so for those sites that get all the pageviews, just like the apps Louis mention, get large chunks of money.
What’s more, many of these sites not only are peddling content and ads, but influence as well (generally much more influence than an app page). By that, I mean as a frequent visitor of any of site, you’re much more likely to trust the analysis and value-add in the pages of a TechCrunch, Mashable or GigaOm than you are likely to trust whatever happens to have bubbled to the top of Digg, Techmeme or Twitter’s trending topics.
That’s web advertising 101, though.
The Advertising Crunch
It’s undeniable that there’s a web advertising crunch going on right now, just as there’s a crunch in all forms of advertising right now. To say that it’s only going to get worse, as Louis does and Duncan fears, is a bit short-sighted.
Louis says: “It is my belief that this problem, while exacerbated by the financial downturn, has been a long time coming.”
Keep in mind that what Louis bases this idea on is the same idea espoused by Allen Stern and others: web ads are doomed to fail because heavy Internet users all develop ad-blindness.
The problem with this supposition is that it is just an assumption, and it’s only based on anecdotal evidence. Even a survey of readers of Web 2.0 blogs indicates nothing. Certainly, a majority of readers won’t be clicking on ads, but just because the most savvy and most heavy Internet users don’t click on web ads doesn’t mean that the majority of users don’t click on web ads (or perhaps more accurately, that a sufficient number required to “power the web” out of the mainstream of web users don’t click on ads).
So, all things considered, it’s a bit of a stretch to say that his concerns from last year have somehow been proven true now that the economy has slowed down.
Ad Buys Have Slowed Down, Though
I’ve even noticed the slowdowns on the couple ad networks I currently participate in, and they’ve slowed down significantly (to the tune of about one quarter of what they usually produce in revenue and ads).
The thing is, most of these ad networks of I participate in are open networks that don’t actively solicit buyers (sort of like AdSense). When you turn around and talk to folks who either actively sell sponsorships themselves or have an in-house sales team, you get a much different story.
Is it the beginning of an end? The terminology Duncan used (“apocalypse”) might be a bit dramatic. Another ongoing story Duncan’s been chronicling lately has been the death of the print news business. More and more newspapers are transitioning online, and the ones who haven’t been moving that way are dying off in record numbers. Many pundits say that we’re going to be looking at a vastly different journalistic landscape within the next five years or so. I agree with them.
To that end, where do you think those ad dollars are going to go? Those same companies are going to need to advertise, and those same eyeballs are going to crave their news.
What is the eventual junction of these two groups? I think that the answer “online content providers” is a pretty safe bet.
So is web advertising (for bloggers and app makers) dead? While
it may be in the ER ward right now, it’s hardly dying.