Is online advertising failing or is it just the recession?
March 23, 2009 Leave a Comment
Eric Clemons has just written a very thoughtful article on “Why Advertising Is Failing On The Internet” on TechCrunch. His high level argument is that the Internet shatters all forms of advertising because it allows consumers to bypass them. He provides evidence for why people don’t trust ads, why they don’t want them, and why they don’t need them. He then goes on to illustrate how the Internet provides ways for people to meaningfully get the information they need without them.
He then moves quickly from advertising to the ecommerce space where he talks about new monetization models around selling real things, selling virtual things, selling virtual experiences, and selling misdirection (a subject where he expresses a lack of faith in Google’s revenue model and sustainability.)
Unfortunately, he falls short in the end of providing a list of concrete replacements for advertising. Can you really imagine a world without ads? Surely they will exist, perhaps in different forms, but they will be omnipresent. In addition, he sites declining online ad revenues to support his thesis at a time when the culprit may be nothing more than the current recession. Whatever the outcome, his sweeping approach to the landscape of online advertising bears reading.
He indicated that changing the business will take time, and that their revenues will grow more slowly than the ecommerce market in ‘09, track it in ‘10 and surpass it in ‘11.
