Here are a couple themes for today: One is the premise that improving ad spending online is simply a matter of changing the conditions. And the other is increased legal challenges that protect larger media companies but work to the detriment of the rest of us, their customers.
Right upon the heels of unveiling the largely popular iPad, and a new operating system for the iPhone, Apple has rolled out an ad service platform called iAd. Basically, this is a pretty self-serving attempt to eat away at Google’s dominance in online advertising dollars. Here’s a quote:
“In his presentation, (Apple CEO) Steve Jobs expressed a sentiment that even many mobile ad evangelists concede as well: “We think most of the mobile advertising really sucks. We thought we might be able to make some contributions.”
But the main contribution Jobs is talking about involves making the iPhone app experience a little less vexing. As Apple explains in its release, when users click on mobile ads, they’re almost always taken out of their app to a web browser, which loads the advertiser’s site. Most of the time, that process completely cuts users off from what they were originally doing in the app. So, iAd’s solution is to offer advertisers a full-screen video and interactive ad content without ever leaving the app, and letting users return to their app anytime they choose.”
Makes sense, but leaves out the one little sticking point that I have never been able to get past: Readers actually have to click on an ad for it to be of any use. As we’ve seen with so many of the advancements in technology over the past decade or so, people don’t like ads. And they especially don’t like them we’re they’re shoved in your face. DVR’s became so popular so fast largely because it allowed viewers to cut out the commercial breaks. Personally, I’ve moved on to watching TV shows on DVD or in other digital means simply because the experience is far, far superior without the intruding block of ads every ten minutes or so.
We also saw it with pop-up ads, as web browsers starting building in blockers specifically to head off those annoying little things before they even opened. The reason the cost rate for online ads has been steadily dropping is not because of a lack of possible customers, but because very few people actually click on the ads, or even recognize that they are there. Advertising worked so well in outdated models like print because we couldn’t avoid it. The new platforms allow us, the reading, consuming public, before-unheard of power to stay away from annoying advertising. Like most industries today, the internet has forced what should be a shift from the way things used to be done for advertisers. But has it?
Read any article anywhere about online advertising, and all anyone is talking about is better targeted ads, that is companies harvesting your personal browsing data so they can throw ads for things they think you might want at you at every turn. Does anyone out there really think people want that? How many people are going to leave an iPad app they are currently using to click on a full page distraction of an ad, no matter how flashy and interactive it is? Superbowl commercials are the holy grail of advertising, sometimes seeming almost a bigger show than the game itself, but if the audience actually had a choice between watching a random camera sweep over the crowd or the newest Pepsi commercial, what percentage do you think would actually choose the commercials? This is a major problem. Times have changed. When people want a product, they’ll look for it. Experience and technology have proven time and again, that when given the opportunity, people would avoid ads in a far larger percentage than will welcome them, no matter how targeted they are. Advertisers, like publishers, had better adjust and soon, or else they’ll end up spending large amounts of money on promotion that really is just going in the pockets of the people selling you the platform.
My second point for today is about lawsuits. There are two that caught my attention recently. The first is a legal challenge ensuing over Great Britain’s recently passed Digital Economy Act. I’ve touched on this previously here. To it’s credit, a major ISP in England, Talk Talk, has come out strongly opposed to some of the provisions in the new law, specifically those requiring the disconnection of service for people accused of copyright infringement. I had a problem with this as well, primarily because it puts the burden of proof on the accused to show that they are innocent. Here’s a quote from Talk Talk:
“If we are instructed to disconnect an account due to alleged copyright infringement we will refuse to do so and tell the rights holders we’ll see them in court.”
Here, here. If only all companies had the balls to stand up to this kind of legislation bought and paid for by industry to protect its own interests at everyone else’s expense.
Speaking of which, the movie rental kiosk operator Redbox has recently filed suit against Universal Studios and Twentieth Century Fox on the studios’ new policy of requiring the $1 rental places to withhold new releases for 28 days, ostensibly to support flagging DVD sales. The online, mail-order rental company Netflix, unfortunately has acquiesced to this demand, making me glad I canceled my subscription a while ago. The wait for new releases was bad enough as it was, but adding an extra month to it, when you can still, inexplicably, rent them same day at actual brick and mortar stores like Blockbuster, makes that monthly subscription fee a whole lot less useful. Reportedly, Netfilx negotiated a big discount from the studios, on the level of 50%, for agreeing to the delay. No word on whether they’ll be cutting their subscription price, though, to accommodate the real victims of this policy, their customers. Don’t bet on it.
At the heart of this matter is the belief that the inexpensive rental places are undermining DVD sales. Like the music industry before it, the studios don’t seem to get the shift in how people consume their products. They seem to believe that forcing people to pay high DVD prices will suddenly bring back the profits they’ve lost due to the changing habits of its customer base. Not only won’t this work, but as happened with music, it’s likely to alienate their own customers, leading to further sales declines. But then, they’ll find someone else to blame. As is the case with all media companies in the face of declining profits and revenue, it’s everyone else’s fault but their own.