The Devil & Online Advertising

A very long time ago, way back in the past… like 10 years ago, people started getting on this crazy thing called the World Wide Web. Somewhere in a dark room filled with crabby old men, it was decided that advertising online would never make sense… “nobody is really going to spend a lot of time in front of the computer. They have books & magazines to read, movies & television to watch, music to listen too…” (I guess they never thought we’d end up doing that ON the computer.)

It was this lack of faith in the internet that kept online advertising from being seen as a legitimate way for companies to reach their markets, so the key to the internet’s chastity belt was left right out in the open. With no set rules, people looking to make boon with online advertising established the game. Web pages could have several if not a dozen forms of advertising on a single page. (Can you imagine a 30 second TV commercial that pitched 213 different companies?)

How Do You Measure the Madness?

As it it is now there is no practical and meaningful standard of measuring a websites true value from an advertisers perspective. Let’s examine the following methods currently used to measure a websites attractiveness to advertisers…

The Most Common Terms of Traffic Measurements Are:

Unique Visitors - When an individual visits a site. Often tracked by unique IP address, unique visitors are only counted once no matter how many times they’ve visited in a given time frame.

Page views - How many times a unique visitor has loaded a single page on a site. One unique visitor could count for dozens, or even thousands of page views in a given time frame.

User Sessions - The session of activity that a user with a unique IP address spends on a Web site during a specified period of time. The number of user sessions on a site is used in measuring the amount of traffic a Web site gets. The site administrator determines what the time frame of a user session will be (e.g., 30 minutes). If the visitor comes back to the site within that time period, it is still considered one user session because any number of visits within that 30 minutes will only count as one session. If the visitor returns to the site after the allotted time period has expired, say an hour from the initial visit, then it is counted as a separate user session. - From webopedia.com

Hits - The number of “hits” a website gets is a useful number to know… like knowing how to make a fire for warmth, when you are freezing to death at the bottom of the ocean. Why does this number ever even get mentioned? It should have died the second it was created. “Hits” is the most misleading and meaningless web statistics term. “In web analytics, a hit is any request for a file from a web server.” So my one page website has 250 very small images on it and a style sheet for formatting my text. Every time my site is visited, the main page file is accessed, so is the style sheet and so are the 250 images… resulting in 252 hits per page view. So please for the sake of all that is sacred and good on this earth, please stop using the word hits when referring to anything to do with web statistics!

Poor Value Comparisons

Because our measurement terms are not always used correctly and each web statistics system measures website traffic differently it is nearly impossible to compare one site to another to find a value comparison.

Alexa has grown into one of the major site ranking and traffic measurement sites, despite the huge flaws in their system.

1.) Alexa measures traffic via people who have the Alexa toolbar installed in their browsers. So depending on your market you could be penalized for having a demographic of visitors who dislikes having extra clunky toolbars in their browsers.

2.) Categories on Alexa are organized by DMOZ, so unless you’ve managed to get into the frustrating DMOZ system… Your site won’t show in any of the category listings on Alexa. To learn more about “How to Get Into DMOZ” read this article by Jaimie Sirovich.

3.) Alexa shows their traffic measurement in confusing ways with percentages of Reach and their Page views. Not to mention their system for page views is ridiculous. “Page views measure the number of pages viewed by Alexa Toolbar users. Multiple page views of the same page made by the same user on the same day are counted only once. ” So if you have a site like POPURLS, you’re only getting one page view per visitor per day, despite the fact that your content is changing hourly.

Even other sites like Technorati & Delicious can show popular activity on the web, but aren’t exactly able to compare sites across the web.

Ad Network Representation

So taking into account that we can’t really accurately measure web traffic and compare it to another site, or accurately judge the loyalty of readership on a given site, or simply the value a website presents to an advertiser… that brings us to the people that are selling this big old mysterious thing called online advertising to anyone that will buy it.

A profit share that I’m pretty sure The Devil is jealous of
In just about every other industry where one party represents another party for a fee or percentage of interest or benefit of the transaction, the percentage is usually 5 - 15%.

Here is a quick scale of industry profit shares:

Rural Village Matchmaker: 3% of Dowry or 11 chickens.
Residential Real Estate Agent: 3 to 6%
Talent Agent: 5 to 10%
Venture Capital Broker: 5 to 10%
Boxing Manager: 10%
Trial Lawyer: 33%
The Devil: Your Soul
Ad Networks: Your Soul & 30 to 60%

A 50% fee just to match me up with a shady company selling a text link on my site for “Free Animated Smiley Faces”?

Right now ad networks are a necessary evil. There is no way for a small-medium sized site publisher to get a call into the major media buyers to sell space on his / her site. The networks have the sales dogs and Rolodex to land sales, but they seem more concerned with making lots of change right now instead of dollars in a more quality, standardized future web.

View a breakdown of the Major Ad Networks.

Is There Any Hope for a Solution?

Online advertising has rocketed into a major industry, so in order to get things to change you need a strong disruptive force and some great leadership. I’ll be attending the Future of Online Advertising Conference in June in hopes of finding some of those leaders. (If you’ll be there too, let me know.)

Cut the Click-Thru Crap

Adsense was an amazing tool in that it gave every-joe the ability to monetize their site, but when the model pays out more money per clicks… you’re just setting things up for click fraud. Google has already settled millions of dollars worth of click fraud law suits, but Pay-Per-Click ads still encourage site owners to trick their visitors into clicking ads. A site owner may not start the morning off with the intent to defraud advertisers, or trick his daily site reads, but at the end of the day if he makes pennies compared to dollars when people click his ads… he’s going to find a way to put his text ads in places that make them appear like content or so that they don’t look like ads and get accidental clicks. This doesn’t help anyone in the long run.

Cost Per Influence

Jim Coudal at The DECK uses the term Cost Per Influence in their advertising model and I think it is a step in the right direction. I think we have to consider the value of the traffic on a site and the influence it has on it’s traffic.

A spammy, made for adsense type site about buying fishing equipment with good page rank and a great domain name might get thousands of visitors a day, but I doubt any of those visitors ever come back once they realize there was nothing of value at the site other than advertising links. On the other hand there may be an original blog written by an experienced fisherman who reviews products and where to buy them. His site may only get 1/2 the traffic the spam site gets, but you could say that his traffic is x10 more valuable. Right now ad networks are not considering the value of this traffic.

Accurate Rankings & Value Comparisons.
We absolutely need to define how it is we measure web traffic and then we need to create a score for each site that takes into account:

Average Time on Each Page: The longer an ad is exposed to a visitor the greater the value to the advertiser.

Return Visitor Percentage: The loyalty of a site’s readership will have an affect on the sway it will give to an advertiser on that site, and increase the positive attitude towards that advertiser.

Ad Impressions Served: The total number of ads served on a site and presented to visitors.

Ad Exposures Per Page: The more ads per page the less influence each advertiser has on a visitor.

Let’s compare to hypothetical sites…

Site A Time on Each Page: 5 Seconds Return Visitor Percentage: 40% Ad Impressions Served: 10,000 per day.     Ad Exposures Per Page: 2 per page.

Site B Time on Each Page: 2 Seconds Return Visitor Percentage: 20% Ad Impressions Served: 100,000 per day. Ad Exposures Per Page: 4 per page.

We can see that while Site B is serving 10x the ad impressions of Site A, visitors are spending less time on each page, aren’t as loyal and are subjected to twice the ads. Site A should be able to charge much more per ad impression than Site B. Right now ad networks aren’t taking the time to understand the value of each site’s traffic and thus we end up with spam crap sites making as much or more in advertising revenue than original, quality content sites.

Raise the Price. Raise the Quality.

Do you know why you only see those terrible, low-budget ads on your local television stations? Because it costs too much for those guys to hock their “Super-Mega-One-Day-Only-Sales-Extravaganza!” on national television. When the price point to advertise online is in the pennies per CPM, then you’re going to end up with low-quality advertisers. If all major networks were required to set a minimum standard of around $4 CPM, it would make sites like Myspace next to impossible to advertise on. Your $400 for 100,000 impressions would go in a matter of minutes… unless, myspace showed less ads per page and increased usability so people could, comment, rate, search etc. using technology like ajax. Myspace could make more money creating a better user experience and loading less of their bug ridden pages, giving their servers a break.

We have all these amazing new advancements in web scripting that allow us to give the user a great experience, but when we implement them we kill our page views. And so long as advertising income is generated by page views, we’ll continue to have sites that break up stories into 15 pages, just to make a few more pennies as you frustratingly click ahead to finish the article.

Change the Industry.

In order for us to stage a revolution we all need to understand just how bad it is. We, as site owners, publishers and writers need to begin to demand a higher level of quality. Online Advertising just said something bad about your mother… so get upset, use your site or your blog to share the information and demand a change.

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*I would like to personally thank Myspace.com for all of the crappy banner ads used in the header image of this article. Without their dedication to shoving as many ads down our sockets, regardless of their quality, I would have had to spend a lot longer looking around the web for bad banner examples.*