Conversion Rater

In the Washington Post over the weekend Frederic Filloux asks “Why is digital advertising so lousy?”.

That’s a loaded question of a headline firmly entrenched with Frederic’s opinion leading us down the path of lousiness. That being said, I don’t know that anyone can argue that digital advertising is at the place where it needs to be in order to deserve the large shift of advertising spend that will eventually move online from offline. But is it lousy? Does it deserve the tongue lashing Frederic gives it? As a whole, it does not, but of course there are portions of it which do. The same could be said for television and print magazine. Are we to believe that all TV and print ads are high quality and perfect?

Not only that, some of Frederic’s arguments don’t make any sense so let’s take those head on:

Let’s face it. On digital media, advertising hasn’t delivered. In the news business, we have a rule of thumb: An electronic reader brings 15 to 20 times less in advertising revenue than a print reader does.

Frederic uses this to say that digital advertising has missed it’s target. Even he points out though that there are many other factors that play into this. Besides that though, perhaps this isn’t just a case of digital advertising not being effective, but some of this should be attributed to measurement. What do I mean by measurement?

Well, offline advertising does not have the same tracking mechanisms and analytics that digital ads have. We know the actual physical response that digital ads create, and can back those actions into ROI metrics against our ad spend. We don’t have that luxury with offline advertising, so it’s much easier to overcharge advertisers in the offline world. Additionally, digital advertising gets little to no credit for it’s brand building impact, for digital ads influencing offline purchases, for digital ads influencing online searches and purchases but not directly from an ad click, etc. While these indirect things are attributed to offline ads without any real measurement, and they can charge more for it. What gives?

While Frederic might say that digital ads bring in 15-20 less ad revenue as an offline reader, I’d tend to say that perhaps offline ads are 5-10 times more expensive than they should be.

They end up as fodder for ad-blocking systems. Unfortunately, these defense mechanisms are thriving. A Google query for “ad block” yields 1.25 million pages that send you to dozens of browser add-ons. On Firefox, AdBlockPlus is the most used extension, with more than 80 million downloads and more than 10 million active users. The same goes for Chrome, whose ad-blocking extension is downloaded at a rate of 100,000 times a week and now has more than 1 million users. For Internet Explorer, there are simply too many add-ons to count.

Wait, so because people use ad blockers that means digital ads suck? What’s the comparison here? There’s really no equivalent of digital ads in the offline world so this is a stupid comparison. The only thing close to an offline ad blocker would be the DVR allowing people to skip commercials. And those haven’t been popular right? Of course they have. Either online or offline, people generally do not like advertising and chose to ignore it or block it in any way possible. No matter how creative or good an ad might be, there will always be internet users who will want to block any and all ads. If there were an offline equivalent that allowed people to block newspaper, magazine, and TV ads, don’t you think those same people would block them? Of course they would.

Another sign of the ad-design failure is Apple’s decision. Not only does Apple enter the mobile-ad business as a sales house, but Jobs’s company will also design ads, for a hefty $50,000 to $100,000 fee. Apple’s message is that the profession needs to reboot advertising graphical standards. How strange to see a technology company giving lectures on design to the very people who prided themselves for their creative brilliance.

I generally agree with Frederic that ad design can improve. But there are also already many great ad implementations that have been done, and many more that will be done. While this happens, there will still be lousy ads. In fact, there will be a lot. You know why? These lousy ads actually drive A LOT of direct response, and in turn revenue. Does Frederic think that all these ugly and annoying banners exist simply because there are no good designers? On the contrary, almost all of them are intentionally designed to be ugly and annoying to catch the eye and draw the click. I’ve seen the ad results of when people test nicely designed ads vs. lousy and annoying ads. Guess which one generally draws the most clicks and revenue? Yep, the lousy ones. If we measured brand-building impact, then the results might be different.

Apple getting into the ad design business is a sign that they feel that ad design can get better. I’d also argue though they are doing it to charge advertisers an arm and a leg, to get closer to them, and to cut out middlemen and give themselves more of the profit. It’s not simply that they think ads suck.

Frederic’s last points about ads being bought and sold in too much of a tech or engineering point of view has some truth to it, but should that really be surprising at this stage of the game? We’re talking about a computer-driven world, it’s natural for the tech people to be leading the charge. Rest assured Frederic, good ad design will catch up, there’s too much money at stake for it not to do so.