Are Online Ads An Endangered Species?
March 26, 2008
According to experts the use of online advertising will increase by 23% in 2008. This is more than 40 billion dollars, but a riot might be around the corner.
Adsense has made Google one most valuable companies in the world and the ads on social networks such as Facebook help those companies make billions each year.
But could all this be in danger?
A new analysis from Deloitte indicates that more and more users are tired of online ads.
Are you one of them? Do you find online ads more annoying than ads in newspapers and television?
A good example is the latest protest against Facebook’s Beacon system. When Facebook users shopped online, Beacon told friends and businesses what they looked at or bought. The latest statistics show that users doesn’t spend as much time on Facebook and MySpace as they used to.
This tendency might turn Facebook and other social network’s ad-goldmine into a nightmare. There might be some light ahead though. According to the Media Summit 2008 in New York, there are other ways of targeting consumers online, but it requires courage.
As you probably already know blogs can circumvent this. If a blog recommends a product on Amazon, you usually don’t consider that advertising. If you let a blogger tell you what they think about a product, it will remove the suspicion towards a product.
But will companies entrust their brand to the users? Brands like Pepsi and Coca-Cola spent billions of dollars building a strong brand. Will they allow users to play with their brand and values on YouTube?
The companies will have to redefine their brand and if they want the users to be engaged, they have to let go of their perfect image. This transformation requires a lot of confidence and I’m certain some companies doesn’t want to risk it.
Sources: Media Summit 2008, Beacon protests, Deloitte Report
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I don’t think we’ll see an end to web advertising in the forseeable future, if ever. The advent of context specific advertising has been just too profitable for all companies and individuals involved. Advertisers get a premium, people who place ads on their site get a cut and the people who’s product/service is being advertised get extra business, a win-win-win situation.
I do however think that facebook and MySpace are performing a dangerous balancing act. Too few adverts threaten their profits, too many threaten their userbase.
Good post, interesting points.
True. It’s a delicate balance. I think Facebook has already stepped over the line once with Beacon. They saved that one on the goal line.
Thank you for your comment Dan.
PS: I haven’t forgot the “debt” to you yet. Link is coming up
It is dumb to think that the online ad is truly an endangered species.
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