Kent Newsome on technology, music and life

2/13/2006


Question of the Day

Why, when people are spending all kinds of money buying TIVOs and satellite radio purely to avoid ads, is so much of the newish tech-related business we read about based primarily on ad revenue?

I believe that it's a proven fact that most people who have the know-how and hardware to receive these Web 2.0-related products will go out of their way and come out of their pockets to avoid ads. In fact, I believe most people hate ads and will go to great lengths to avoid them.

Now comes word that some publishing company is going to hawk ad-supported eBooks. Well, actually just one (eBook, that is), according to the article. But if anyone decides this folly just might work, it will go from experiment to movement in the click of a mouse.

Let me say it again: in the medium and long term, relying primarily on ad revenue is simply not a good business plan. Nobody wants to see them and nobody is going to click on them. Even if this nutty business gets legs, the advertisers who are paying with cash and not in kind will quickly realize that the system is flawed.

Another dancer in the conga line of bad ideas.

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2 Comment(s):

A fair point, Kent. But haven't newspapers been making a living almost entirely from advertising for quite awhile now? Just a thought.

Mathew

By Anonymous Mathew Ingram, at 2/13/2006 9:21 PM  
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Yes, they have. But old media newspapers are content rich and very sticky, meaning people stay there once the start reading them- offline or online. And even newspapers are dying on the vine now that eBay and Craigslist have smartly taken away some of the traditional revenue sources.

A lot of these new tech gigs are much less content rich. Back in the nineties when ACCBoards.Com was getting 5 million page views a month, the advertisers weren't happy because message boards (the forefather of blogs) weren't considered content rich enough.

And we couldn't even get the major agencies to place ads in our chatroom. We had to sell those directly and cheaply.

At one point, we actually lost our ad agency altogether as a result of the perceived content problem, even though we were getting millions of views a month and were one of their larger accounts.

I'm not saying that the most content rich and popular blogs can't make money via advertising, but it seems that every deal I read about relies on it. There's a lot more ad revenue in the collective pro-formas than exists in the wild.

Plus, it's cyclical and before long the advertisers will once again sour on online ads and wreck the whole show.

By Blogger Kent, at 2/13/2006 9:45 PM  
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