The advertising model's failure had nothing to do with click-throughs, other than the fact that advertisers were sold the media based on the click-through. Click-throughs, as numerous studies have shown, are a virtually meaningless statistic. They give little indication of a consumer's ultimate actions, and are more of a knee-jerk metric than a test of a consumer's true interest. I consider click-throughs a measurement of what percentage of the audience has nothing better to do than be diverted from its course.
The real problem with online advertising is that, in the past, it hasn't been able to deliver an emotionally compelling message.
Radio, TV, print and outdoor advertising are all considered to "work." Online advertising is no different. In fact, you can reach a far more targeted audience -- and do so more economically -- than with any of the other mediums. People just need to understand how it works.
The original online ad spaces were designed by technologists, not communicators. The dimensions of online ads are ridiculous. In fact, the 468x60 was established when someone thought that it would be a good size because it could hold a sentence without a line break. I can guarantee you that a designer didn't come up with that notion.
Finally, things are starting to change. The Interactive Ad Bureau has recently issued five new ad dimensions, much more TV-like in aspect ratio. Also, the k-size, or memory size of the banners, is going up. And, rich-media technologies like Flash are becoming common. All of those factors will go far in enabling online ads to produce the same emotional impact as their offline counterparts.
All of those factors are being quickly adopted/accepted by the media, which need to find a way to deliver quality ad units to advertisers. When you combine all that with online advertising's track-ability, you have a very powerful marketing vehicle. I think we're on the verge of a large resurgence in online advertising.
That's my .02 cents. Thanks.
Founder of Basement, a Flash production company