Way Out Where

An interesting piece from Dan Sabbagh at the Times on new technologies to allow you to run targeted advertising on television. Quite apart from the mild digs towards digital advertising, in particular Google paid search, I think there is a core problem with what he is saying, and that is soon people won’t need to watch advertising any more.

The main problem with his arguement is that technologies such as Sky+ will eventually render advertising obsolete. People watch advertising because the adverts are placed between the programmes that they want to watch. They watch because they have to, not because they want to; despite myths perpetuated to allow advertisers to feel culturally relevant, people do not watch ads for fun. They are not the end destination.

So as more people get Sky+, more people will realise that they don’t need to watch the advertising at all. Sky+ isn’t particularly cheap, so I imagine certain demographics will be the first to be untouchable by TV advertising. Those with money to pay for it, and with an early-adoptor attitude to make the initial leap that says “I don’t NEED to watch these ads”, will be the first to go. And then slowly it’ll spread, until eventually, I expect that they’ll be just a small core demographic left that can’t afford the technology or don’t want to understand it. Of course, even this will go eventually, but in the meantime I guess we’ll be seeing a lot more of Daz’s Doorstep Challenge.

I’ve just ordered a shed load of stuff from Moo.com (this is what happens when I upgrade my Flickr account and have more space for photos!) and it just reminded me what an unbelievably great site it is.

They’ve actually created an application which is fun to use. Possibly the only thing in the world where the ordering process leaves you feeling better than when you started.

They’ve made ordering and getting the product fun.

They’ve made ordering and getting the product part of the product itself.

Genius.

Last night we checked out Shunt - a new club, calling itself a “lounge and theatre company”.

Going in is slightly surreal - a small door inside London Bridge station opens out into a vast cavern (there is something of the Plaform 9 3/4 about it) and you follow luminous lights up to the main stage and bar area.

Getting served at the bar was a serious pain after a while but its an interesting and fun use of the space.

A few more photos on my flickr page

The New York Times has removed almost all of its content from subscription-only. People tell me that the Wall Street Journal will soon do the same. In Chris Anderson’s recent article for Wired magazine, he names advertising as one of the 8 business models that will allow end users free content. All hail the ad-funded business model.

I have a nagging problem with this though - online advertising doesn’t work. And if it doesn’t work, people will eventually refuse to pay for it. If no-one’s willing to pay for it, then no model exists.

Its generally accepted that current click-through rates on banner advertising is 0.2%. Yep, for every 1,000 impressions, you get 2 people clicking through to the site. Lets say you’re paying £20/CPM - this gives you a return of £10 per person. Just to visit your site.

Some people have said that the downturn in banner effectiveness is a recent thing, and this is what I’d always assumed. Perhaps clients just hadn’t noticed yet. Perhaps with better creative execution, click-throughs might go up again. However, this article from 2000 suggests that in mid 2000, click-rates were already at 0.3-0.5%. That’s almost 8 years ago. Technology and the creative execution of online ads have changed a lot in 8 years. And we’ve not seen any great up-turn in clicks.

The latest potential “savior” for banners seemed to be targeting - media owners such as Facebook were going to be able to offer you incredibly powerful, micro-targeted advertising. And again, at first it sounded convincing. However, this study on who clicks on banner ads (amusingly enough undertaken by a group of media agencies) revealed that 6% of web users are responsible for over 50% of all clicks on banner ads. From ReadWriteWeb:

Those people who click heavily have a number of other characteristics of note. “Heavy clickers skew towards Internet users between the ages of 25-44 and households with an income under $40,000,” the study said, and they “are also relatively more likely to visit auctions, gambling, and career services sites – a markedly different surfing pattern than non-clickers.”

So, as long as you want to target these users, then it would seem that banner advertising is perfect for your needs. Otherwise, perhaps not so good.

People have also talked about banners building brand awareness, of which I couldn’t find a single study to prove or disprove either way. It would be interesting to see the results of such a study, although I have to say my gut feel is that banners wouldn’t and don’t build brand awareness. Besides which, in order to build awareness, the user still needs to see the banner in question. Which the phenomenon of “banner blindness” seems to suggest happens less and less. Again, this is not a new thing - it was defined in 1998, and updated studies suggest that it is on the increase.

If you add everything up, it seems absolutely crazy to me that this is now one of the largest businesses supporting the internet. Internet advertising spend is growing year on year - companies are continuing to pile money into this. Surely at some point they have to realise that the return they’re getting simply isn’t worth the money.

What this means for advertising is that you’re going to have to be much cleverer with what you do online, and you’re going to have to work harder at integrating different channels, to work together to deliver successful campaigns. No biggie here really. We all know this. And this is the fun work anyway.

What this means for the internet at large is more interesting - we’re using a fundamentally fucked model to build businesses off the back off. If clients realise that online advertising doesn’t work, then what is going to happen to the millions of sites that now rely on advertising to survive? Can they all switch to one of the other free models that Anderson suggests? Or might we see a rather large internet cull?

There isn’t anything much to say about this, other than watch the video, then watch all their other videos. Simply brilliant

9/11 Conspiracy Theories ‘Ridiculous,’ Al Qaeda Says

Yesterday evening I got back from the iMedia Summit at Sopwell House. It was an interesting event - the most interesting speech by far was by a non-advertising person - Hamish McRae, giving an inspired 45 minute talk about the state of the world economy, and - just perhaps - how it might impact us as communicators.

The reason I think this was the most interesting was because it was from a non-industry person. Conferences have a habit of becoming a bit of a navel-gazing marathon - either too self-congratulatory, or too self-damning - either way, there’s a lot of “self” involved. It was really refreshing to hear from someone outside of the industry with information that was fascinatingly interesting and very, very useful.

Hearing Johnny Vulkan from Anomaly was also interesting - what he and the other partners at Anomaly have done is create an entirely new business model for agencies. Anomaly is described by Ignacio Oreamuno as

Anomaly is not driven to make ads, it is driven to solve business problems.

(full write up here)

What is so interesting is that this has forced them to work out new remuneration models for their business. Sometimes they work on a standard agency fee, but more and more they’re getting paid by taking royalties in the sales of the products they help create, even launching their own products under their own IP.

Can you imagine the extra drive and passion you’d feel if you were directly tied into a product’s success? How much more of a partnership you’d feel with your clients. I think this is probably the agency business model of the future, where agencies tie themselves into to the absolute success of their clients’ projects, taking their fee as profits based on these successes.

Brief moment of self-congratulatory ego-boosting: I was asked to give one of the opening 5 minute speeches. Inspired by a recent Cory Doctorow post on Boing Boing, I briefly, and I think rather nervously, discussed the idea of the Conversation as King, and what this meant for agencies and brands (I’ll get round to writing the whole thing up and posting it at some point). What was pleasing was that “conversation” was a recurring theme of the 3 days, with many other people discussing similar themes. In general, that was probably one of the best things about the conference - to hear from and talk to a lot of people with similar theories, and to feel that perhaps we’re all moving in the same direction.

Having said that, as Russell Davies said in the funniest talk of the conference by far, “If you haven’t changed already, you’re not going to now”. So maybe it was just a bunch of navel-gazing after all ;-)

Spurred onwards by a ridiculous discussion at work (the gist of which was that you had to use Flash to build interactivity on a website), I decided to build a very quick proof of concept for a javascript slideshow.

In fairness, when I say “build”, what I mean is “plug together a few things where other people have already done the hard work and do a little bit of coding round the edges”.

However, the whole reason for this was to prove how quick and easy it is to build interactivity into sites without using Flash. So I figured using free, open-source code already provided by others was fair game :-)

So, using the completely free-to-use Smooth Gallery alongside the completely free-to-use phpFlickr, I present a javascript slideshow that goes to the Reading Room Flickr pool and finds all the photos currently uploaded and tagged with the word “competition”.

Not a timeline in sight. 

Andy has finished updating our band website with a new photo and, more importantly, the new demo tracks from our time in the studio.

Very exciting. Please check it out.

Something that had until recently passed me by was that the New York Times has stopped charging for access to their website. Most of the site will now be open to the public without a subscription, including the majority of the archives section. The site will now be funded by advertising, an option that, since the success of Google, has become the standard business model for many sites.

On the flip side of this, in an August 2007 Alert Box, everyone’s favourite usability guru Jakob Nielsen has written about an in-depth study that proves web users suffer from “banner blindness” - that is, they never even look at the areas of the page that banners are placed on.

Nielsen says there are 2 or 3 exceptions to this - firstly, search adverts do get seen, meaning Google et al are probably safe. Secondly, classified ads, such as eBay, are looked at and seen. Finally, he talks about in-page, in-context advertisements - ads made to look like normal content that appear in the content area of the page. Whilst Nielson - rightly - considers them unethical, they are very effective, and you can now see this style of advertising appearing online (Facebook being probably the highest-profile example).

Other than this however, most banner advertising doesn’t even get looked at, making them deeply inefficient. As Nielson says

“Marketing managers won’t remain clueless forever. Sooner or later they’ll discover that Web advertising offers almost no ROI.”

I wonder if Nielson is right. If so, then we’re looking at heading back towards a subscription-style model that the New York Times has just left behind.