Internet Ads: Irritating and Ineffective

The advertisements that appear on Web sites are a nuisance for readers and a false economy poised to fall to Earth. Pro or con?

Pro: Ephemeral and Annoying

Quick, name the last two online advertisements you’ve seen.

Too hard? O.K., name the last online advertisement you clicked on. (I mean intentionally, not because it slipped under your cursor while you browsed People.com.)

Can’t think of anything? Being able to tune out ads might make your Web-browsing more enjoyable, but it’s a dilemma for online advertisers struggling to find niches in the cluttered columns of their Web pages.

Online ads are fighting for air on the forest floor of the Internet, where Flash images and written content soak up reader attention. Those rough conditions have encouraged wide experimentation, with limited results. For example, one innovation called the click-to-pay method only charges advertisers when browsers click on their icon. But click-to-pay can be expensive—as much as $2 per hit—and up to 50% of clicks are unintentional or even fraudulent.

To be fair, online advertising has some advantages. Web sites have extraordinary access to consumers, tracking clicking behavior and reader attention-span to sharpen their ad target. Google’s AdSense has been at the vanguard of these reforms. But its contextual advertisements, which use keywords to generate ad placement, can yield both accurate and absurd results. For example, a Google search for Eliot Spitzer generates sidebar ads for The New York Times (which broke the original story about the Governor’s scandal)— and “Client 9” T-shirts.

Contextual advertising makes search engines look like gold mines to ad companies, but they’re also raking in consumer ire and privacy concerns. The backlash comes from browsers who think the data-mining and keyword-spying constitute privacy violations. This has executives worrying that their strength—easy access to consumer patterns and preferences—could also be a weakness if the counterattack has teeth.

None of this means online ads are entirely doomed. The technology is improving and ad companies are learning how to target consumers better. But online ads won’t pay until they learn how to make us pay attention.

Con: Pertinent and Precise

Internet ads are here to stay; thinking otherwise is just nonsense. The movement to the Web is a natural progression for advertising, which has existed for ages, an early form of it dating back to 4000 BCE on Indian rock art.

The 17th century brought advertisements to newspapers. Then, as eyeballs moved toward TV in the 20th century, the advertisers followed. And now that the Web has become a global tool—according to a 2008 IDC report on consumer behavior, almost half of total media consumption is online—and you can rest assured that advertisers are, yet again, following.

Last year, $27 billion was spent online globally, representing a mere 7% of total advertising budgets, so there’s plenty of room to grow. And because today’s ad market spans the globe—30% to 50% of U.S. Web site traffic comes from international visitors—it is less susceptible to the domestic economy.

Many say Internet ads are too pervasive and hence ignored; I believe that, just like traditional media, they’re absolutely noticed when they’re relevant, as proven by higher click-through and response rates to better-targeted ads.

Today’s ad market has networks that serve as “agents” for advertisers, helping them spend money online. As founder and chief executive officer of the Rubicon Project, a service for Web sites that optimizes ad networks to make more money from ad space, I see this trend continuing. Seven years ago there were 15 of these networks; today, more than 300.

These networks differentiate themselves through geographic focus, pricing models (cost per thousand views, clicks, actions), vertical specialties (sports, travel, and gender-specific, to name a few), and format (text, banner, video ads).

Industry analysts predict Web-ad spending will jump to $62 billion by 2012. If this is a false market, it sure has a lot of people fooled. At the very least we’ve come a long way from pictures on rocks.

Opinions and conclusions expressed in the BusinessWeek.com Debate Room do not necessarily reflect the views of BusinessWeek, BusinessWeek.com, or The McGraw-Hill Companies.

Reader Comments

random

If you take a peek at the stats, the click-through rates for banner ads you see on top of Web pages and the square inserts are about 0.8% on a typical site. For social networking sites, that plummets to just 0.4%. But contextual link ads can have up to a 30% click-through rate if they're supremely fine tuned and extremely relevant to a niche site where it's easy to tell what the users might want to buy.

Advertising is all about relevancy, and Web ads actually do work when done right. But I would expect less of the type of indiscriminate, plastered all across the Web advertising we see today and much heavier investment into smaller, niche sites with a more predictable audience that is more likely to care about what you're trying to sell.

Phil Goodman, President & CEO Genergraphics, Inc.

The only thing that is going to make Internet advertising more effective and not seem to invade people's privacy is to appeal to their generational mind set.

This is the only way to break through the clutter in Internet advertising.

Marco Bonanni

I like your article; I think it totally makes sense. I wrote an article on the future of online advertising, and it is in line with what you're saying. http://tapnet2.blogspot.com/2008/03/future-of-online-advertising.html

David Doherty

Very interesting, but what about mobile Web advertising? Once marketers can understand how to reach mobile Web users, they'll find lots more context.

A Thomas

How many of you like TV advertisements? If you do, you'll probably like internet ads as well. It is quite possible that someone will come up with technology to blank out internet ads just like Tivo does for TV.

J Llewellyn

How to make us pay attention?

There is no doubt that Internet ads are here to stay. They pay for the content. God bless 'em.
But that does not guarantee attention. The difference lies in the passivity or activity of the audience.

Advertisers have the passive audience by the eyes and ears. No problem. The active audience is another matter. During a quick reference, an Internet ad may stay on the browser--and simply be ignored.

For those wanting to maintain focus on what they are reading, flashing ads can easily be "disappeared." How?
Browser resizing and reshaping eliminates the flashing, and or barking, ads from view.

The same goes for the sound--the volume goes off. Both sight and sound attention control can be accomplished before the advertiser's identity or product enters the field of vision or hearing. "Click through" becomes meaningless.

Sorry folks. You can lead an audience to ads, but you can't make 'em pay attention.

Beyond this, the more aggressive or intrusive the ad, the more the active audience is likely to simply to leave the site altogether.

What does this do to the numbers? I have no idea.

Adnoid

I switch channels when annoying or obnoxious or bad behavior or feel-good dumb ads come on. Then I may or may not go back. Same with newspapers. The U.S. split in the last two elections, so why do some go
out of their way to be propaganda? Or running down 50% or more of readership.

As if they mattered.

Pawan bhawsar

Online ads are effective if you use the correct model (CPC, CPM, CPL, and CPA). Most of the companies don't realize the kind of ad publishing Web site they use and the ad pay model. Pay model decides your expenditure/investment and also return on your investment. Ads for low cost products like credit cards and movie tickets have to be based on CPL; otherwise, in the case of CPC, CPM ads will lead to loss.

Companies pay a lot of attention to TV/print ads, but why don't they use common sense when it comes to online ads and never think from the user prospective "Will I click on this ad?" or "Will I buy the product/services after seeing this ad?"

Many companies don't even choose to correct pages and location to ads. They advertise
health-related products in business sections of Web sites and credit card/loan, MF products in health sections of the Web site.

In short, to improve the effectiveness of the ads, companies need to place an emphasis on:

1. Ad pay model--CPC, CPM, CPA. Choose the one best suited to the product and company and for the highest ROI.

2. Choose related Web sites and Web pages to publish the advertisement.

3. Ads should have appeal or should attract people who have intentions of buying. In the case of CPA, this requires them to display brand name and product details on the ads themselves.

In the case of CPM, the company should display the name of the brand and make ads more informative and attractive.
--Pawan bhawsar

Keith

I don't see much difference between newspaper ads and Web site ads. There will be, and should be, advertising on pages that provide a service to you (such as news) that you don't pay for.

However, one glaring difference is the sensory overload that some Web ads can provide, due to the technology of the medium. But just because you can do something doesn't mean you should. I do believe the low-key (simple link) targeted ads are most effective, because they're least annoying.

Also, click-through isn't everything. Some ads are are purely for branding and name recognition, so you don't need any clicks to accomplish the goal (like the one over there on the left ;-).

PNW Trojan

Unbelievable. Bludgeoning the Web audience is about as effective as TV ads. We just tune them out. The only memorable ad we've noticed and paid attention to was one for Pemco Insurance, in Seattle. It was about Walla Walla, Wine, and Women--absolutely fabulous. The junk Madison Avenue bozos pitch is just garbage, like spam. We all ignore it.

kuni lemmel

What ads? I surf with a text browser only, so I almost never see all that junk. The few times I've used a full graphical browser it was just too irritating, so I went back to text links. The browser via Blue Floppy is also very nice.

Randy Harrison

It seems to me that we are seeing, if Google is any indication, the maturing of context based ads through search and keywords. At first we were delighted to have some relevancy, now we don't notice them anymore. How fast it goes.

If my research is any indication, the real key is customer control. Data mining techniques, browsing patterns, etc. are tools that allow advertisers to give us something that we are looking for and help us hold on to control.

Letting us choose what ads we may be interested in directly or through profiles we provide, especially if we are getting content we want in return, is much more relevant and powerful.

jeremyb

It's a fallacy to assume that click-through rates measure the effectiveness of an ad. If I see 40 ads for Bud Light in a week, I might not ever click the link to go the Bud Light site. Why would or should I? But when I'm at the grocery store, I may be more inclined to purchase it.

This has always been the case, but the thing is that it is measurable on the web. TV ads don't monitor if you walk away from them or mute them. We always have ignored boring ads and we always will.

Lawson Smith

Yeah, I hate those kinds of ads, too. Especially those that block your access to the web site. You know the kind I am talking about, don't you? Those very irritating ads that pop up when I first try to open Business Week's internet web site.

Clean up your own web site first!

Amber

Some ads are good, some are not. Porn ads on a kid's site-no.

Aleksandre Asatiani

In my opinion some internet ads are efficient but not all of them, as it is with other types of advertising. Personally I have a very negative reaction to the ads that are jumping under the cursor. I do not click them. In addition, I subconsciously build a negative image of the advertiser. For example, I started to look a bit negatively on FedEx after the "attacking" ad on EuroNews page, and I think that I am not unique.

On the other hand, I like Google ads. Yes, they are non-noticable, non-colorful text, and they are not jumping around, but they are always relevant. I click on them seldomly, but if I do click it is intentional. Also, since I already have some interest in the advertised product before I see it, there is larger possibility that I will buy it. All in all I would say that it depends on the advertisement type, but it is the same as on TV (where you can switch channels) or in newspapers (where you can turn the page).

Squeezebox

The most ineffective ads, in my experience, are the ones that offer you a free dinner at Red Lobster if you complete five or six different offers. I've taken the bait once or twice only to see that the offers are for things that I don't want at prices I couldn't afford anyways. I gave up after seeing two or three offers. Who would qualify for the prize? Those suckers pay ten times what the prize is worth in offers.

Jim Johnston

Access versus excess: Opportunity and retrieval of information is good hampered by more than necessary and a lack of moderation. Two words say it all--not necessary.

Gregory Go (About.com Guide to Online Business)

Tivo for Internet ads already exists.

If you use the Firefox browser, you can install the AdBlock extension. You can filter out the ads that you never want to see again.

I agree with the other commenters in this thread. It's all about relevancy. If the message is relevant to what the user wants at that moment, they will be effective.

JeffL

Frank Addante's company, the Rubicon Project, released an interesting report on online advertising today. It's on their website (rubiconproject.com). One point that caught my eye is how many different ways we're being advertised to in the guise of behavioral marketing.

James Revell

I couldn't agree more with Frank and some of the other comments. Online ads aren't going anywhere. If anything, as we've seen, they will evolve over time like many other things. Format, medium, delivery and tracking all have come very far from where they were when there were 15 ad networks seven years ago. Brands and mobile devices, of course, will play a big part in this in the future.

anon

Who sees ads anymore? Download the Firefox web browser, download the ad blocker add-on, and no more ads. Conventional advertising is dead.

james

Ads play an important role in keeping most internet services free. We run 6 jobsites, including www.mojolin.com, and provide job postings free of cost to employers. This service is compensated by Google AdSense. So it's a win-win situation.

JINQIU

"Quick, name the last two TV or outdoor banner advertisements you’ve seen."

OK, name the last TV or outdoor banner ads that you have intentionally read or watched!

Gaurav

Yes, ads are good. They keep a lot of Internet services free, but sometimes irritating ads like pop-ups are the very thing that stops you from visiting a Web site and could lead to loss of traffic, hence the loss of potential revenue.

Martin J. Duke

I am wondering how many ads have been on all the pages I have surfed during my two hours of surfing a day. Of that number I have no clue. What I do know is that I have responded to exactly one. In February, I booked a holiday to Iceland from Cologne, Germany. While that supplier may be happy, there must be thousands who fail to get their messages to me. Maybe it's just me. But I doubt it.

Mike in Spring, TX

I have a policy--never will I buy anything that I see in a pop-up or "floating" ad. Static ads are okay, although I rarely read or click on them.

Darren O'Donoghue

Many user experience evangelists decry the inclusion of advertising, but on things such as a new blog or blog network and/or an unfamiliar or international consumer content site I may have stumbled upon, a healthy offering of banner advertising actually lends legitimacy. It suggests that a third party has vetted the content, feels its authentic, and chosen to participate. As a consumer, when I am seeking credible information or opinion on a topic, I discern the veracity of a site by actually evaluating who is advertising. If it's serving nothing but "house ads" and/or Google ads, it makes me question its authority, save some of those with previously established brand names. A well developed ad targeted online ad unit can be good for producer, deliverer, and consumer.

garden grown

Darren said it all.

Richard

On online ads,

Regardless of the medium, ads are most effective when they are pertinent to those viewing them. Think...the Superbowl has beer ads and the people watching them often find them just as entertaining as the game.

Web advertising goes much deeper than may meet the eye; if you type in a search for any commercial good or service on Google or any other search engine, the sites that show up on the first page have all spent money to be there. Whether through pay-per-click, SEO, or placement firms.

The idea of having a link to your site/product line show up when a user is actually looking for it is brilliant.

I tend to think of the flashing ads and pop-ups as scams: "Click here for free stuff!" I see those as fishy and untrustworthy. Sure, someone will click on it (a 5 year old), but not a consumer with disposable income.

My 2 cents.

Ryan

I find it especially interesting that a Flash FedEx ad appears at the top of this page. If you mouse over the ad, it expands. Once you either close the ad or stop hovering, it shrinks again. The problem is...the main navigation is no longer usable.

Oops. An example of an irritating ad.

nandlal kanjibhai pancholi

Internet has lost credibility and accountability because of spam advertisers. No serious transactions take place through e-ads and e-business. I have invented safe and side-effect-free medicines for paralysis and psoriasis and have cured many people in India of paralysis and psoriasis. I have placed 20,000 ads on the Internet but have not got a single patient from other countries. Maybe people do not trust online ads, thinking that the ad is either by a ghost advertiser or fake advertiser with an intention of cheating gullible ad viewers. My ads are genuine, but they have fallen on deaf ears. There is urgent need to instill an element of accountability and credibility for online ads.

Kiran Patchigolla

Context is the key. I was looking around for financial aid resources for a relative who is going into graduate school. I hit this Web site http://www.finaid.org/fafsa/. They have just one ad from Citibank about Citiassist loans. Sure enough, I clicked it and most probably we will apply for that loan. If there was an ad about cars on that site, I would not have cared.

word carr

One writer was on point. "You can lead the audience to the ad but you can't make them pay attention." The internet ads are flawed. TV and radio use human emotions and human voice and sound. Newspaper, price on common products, food, furniture, clothing, that sort of thing. The internet is used like the Yellow Pages--you find a plumber in the Yellow Pages when the toilet doesn't work. Internet ads do not create demand. The only people who are making money on internet ads are the people who have created a demand for internet ads. The ads on the internet do not even come close to the ROI of radio or TV. Internet ads are a scam and don't abide by the simple rules of advertising. This will be demonstrated in November when Obama loses by a wide margin in part because of the reliance on the Internet.

Jonaan

Never put ads in a way that makes viewers irritated. It will backfire. Select ad places carefully. Otherwise you are paying for hatred.

LAO

I think the answer is somewhere in the middle. I abandoned an e-mail provider who adopted in-your-face ads. I pay attention to some sites' march of ads, because I have the impression that they are keeping me informed about where the culture is going and who is desperate for business--I may eventually buy something as a result, but seldom click on the ad. What I do buy is most likely to be advertised at a site with a narrow, niche audience, but again, I don't think I've ever clicked straight through to make an immediate purchase--I'm going to take note and do some research first. In other words, I think click measurement is probably over-rated. I agree with the commenter who thinks Internet ads do not create demand, but the same is true for me with respect to TV ads, since they've surpassed irritation and I never watch them. The overall intensity of advertising has reached the level of hounding. Consider the SUV. Did the constant pummel of advertising contribute to the disdain that now prevails? I have vaguely wondered why nobody ever asked me what I wanted--if they had, I would have clicked.

nandlal kanjibhai pancholi

The Internet and e-mail can be used as the fastest means of communication among known groups. Nobody trusts a total stranger on the Internet.

In business, the Internet has immense potential, but it is a sleeping giant. Advertising agencies can make fortunes by helping budding entrepreneurs in marketing their products worldwide through the Internet. Auctioning sites get famous names by becoming instrumental in creating international markets for auctioning goods and articles from various countries and cultures.

India butchers its stray dog population on a massive scale every year. Instead of engaging in such cruelty to animals, Indian stray dogs (which are well-known for immunity and health) can be marketed worldwide as reliable pets.

The greatest roadblock in the way is that many people world over still consider snail mail the most reliable means of authentic communication. This is a misconception. Snail mail is an obsolete and outdated method of communication. Only morons would send a postcard to a friend when e-mail is at his disposal.

Furthermore, the Internet can be of great help in transferring scanned documents to distant places at incredibly low cost. Sending the same documents by courier or snail mail would be exorbitant.

In the service sector, the potential of the Internet is yet to be fully tapped. From ads for vacancies to sending interview requests to the remotest places, all kinds of things can be done by the Internet at lowest cost.

The Internet can be put to use for remote learning and teaching processes and programs.

Meenakshi

I appreciate the points made by everyone. People may accept it or not, but "advertisements are the only means through which they can know about the updates in market."

Sometimes when you browse a link like "reach.com," a small ad starts flashing with coupons (grocery, home furnishings, and many others), which can be useful. Have you ever seen an ad of Net Flix when you Google for any link.com? If not, then don't miss it. You can watch movies for free of cost.

Demosthenes

Advertisements are one of the few ways Web sites can make money. The problem with some of them is that they can attract viruses to your computer, making life difficult and frustrating. Television ads tend to be more interesting and witty. As boring and droll as these ads may be, they actually help our favorite companies and television channels continue.

Chris

The most affective ads that I observe online are the ads that are played before a video. For example, the ads played before a trailer on IMDB.com or within a show or movie on Hulu.com. Those ads I actually even pay more attention to than the ones on TV because I know my entertainment comes immediately after viewing them. Some of the ads are even entertaining themselves.

Axl

Contextual ads will grow in importance as companies learn to fine-tune their ads. One issue that many site-owners seem to ignore is clutter vs. price. Too many sites allow too much space for ads, with a cluttered page as result. I suggest to my customers to increase their price per ad space and keep the volume lower, thereby keeping the attractiveness and reader-friendliness of the site intact.

nandlal kanjibhai pancholi

The Internet is a precious human invention. As a resource reservoir of information, it has far outsmarted libraries and other traditional sources of information. In almost every walk of life, the Internet has applications to make human life better in some respect. Above all, the greatest contribution of the Internet is that it has shrunk the world into a wonderful global village. The distances have been wiped out and dialogue made possible between
scientists, philosophers, thinkers, litterateurs, musicians, and artists from various countries and cultures. Never before were these diverse groups brought together on the same platform. In the newfound faith of the Internet, the sky is the limit for creativity and fruitful interaction. The great success of the Internet lies in creating more and more interactive forums and creating reservoirs of think tanks for instant utility. The world's latest expertise in various applied fields can be brought online, and the services of experts and specialists in various areas of knowledge and skills can be made available to the poorest and the most isolated people in the remotest corner of the world. The Internet has been profusely and relentlessly abused by spammers. We all should unite to eliminate spammers. There should be provision of the sternest punitive measures for spammers. To successfully eliminate from the Internet the virus of spammers, we must make verifiable identity of an Internet user a must. Let's decide and ensure unanimously that no spammer should be able to sabotage the credibility of the Internet through spamming and by fake ads and fake communication under pseudonyms and bogus addresses. Every man communicating on the Internet must be accessible telephonically, via e-mail and at his snail mail address. If this is not done, our idea of making the the Internet a useful tool for human progress will become a distant and impossible dream.

Chris

When I hit a site and the first thing that pops up is an advertisement that I have to search for the Close button for, that puts me totally off the site or the advertiser. I'm not sure what mentality they are using, because if I come to a site, do they really think I'm going to impulsively detour off the site I intentionally came to get information? I close all pop-up ads just for irritating me. However, on the other hand, click banner adds that stay quietly off to the side or embedded in the site are okay, because once I finish getting what I need, I will go look at the ads that interest me.

M. Bee

About flashing ads: A family member takes medication for "seizure disorder" caused by brain injury from an accident when she was 62. Some neurologists call it "adult onset epilepsy." Her neurosurgeon and physical therapists say anything flashing rapidly could, despite medication, trigger one or more tonic-clonic (grand mal) seizures. When online, if she can't resize the screen so flashing ads don't show, she never revisits that site. Thousands of people suffer from epilepsy or "seizure disorders." We sometimes wonder how many have been adversely affected by flashing ads, but so far we have found no data relating to that subject.

Caricouture

I think it's a mistake to judge the efficacy of online advertising solely on click-through rates.

People don't immediately drop the newspaper and run to a store for which they've just seen a print ad. Similarly, not everybody is willing to interrupt their browsing session to click through to another site. That doesn't mean the ad hasn't affected the viewer though.

For example, I've seen quite a few ads for net-a-porter.com on various fashion sites. I've never clicked through, but I have browsed that site far more often as a result, albeit in my own timeframe.

I think companies that only advertise online will appreciate this, but multi-channel advertisers seem to seek a level of instant return that they would never expect from print or TV ad spend.

carl

Internet advertising is for me much like advertising via any other medium, mainly pointless. If I want a product or service, I will intentionally go looking for it. This also applies to the armies of volunteers who now accost me in the streets trying to get me to hand over my bank details for one supposed good cause or another. If I wish to support your cause, I will go into a charity shop and purchase something. I wonder how much advertising actually helps companies any way. Just because you have spent X amount of money pushing a product, are you really getting your money back on it? For me, the only ads that stick out are the ones where there has been some interesting creative element put into it. This can be backed up by the fact that a lot of people I know can tell what happens in the advertisement but not what the ad was advertising. Instead of spending huge amounts of money on advertising, maybe it should be spent making things that last, that work in the way you expect them to work and provide decent customer support. These are things that make a difference for the customer. If the product or service is reliable, then consumers will recommend your products or services to others. You will make sales. It really is that simple.

Bob Mulligan

Blah, blah, blah. This is America. The only way we can stay "America" is through advertising. Now if it's "good or bad" advertising that's more than just academic, that is survival.

Susie

I use host file, adblock, and flashblock. Ads are annoying and take up bandwidth and computer resources.

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