Advertising-Funded Business Models: Bubble 2.0
The number of companies
that chase the same advertising dollars as their only business model is a sure
sign that we're at the peak of Bubble 2.0. It would be much more sustainable if
companies aimed to create services that users valued enough to pay for.
Right now, considerable advertising money is sloshing through the Web because
most marketing managers remain clueless about how it works.
They think that because search advertisements generate lots of business, other
Web ads must work just as well. What a fallacy — brought on by
ignorance of the basic Web user experience. People go to search engines when
they're explicitly looking for a place to do business. This is why search engines
profit from sucking up the work of content sites (where users exhibit strong
banner
blindness).
Marketing managers won't remain clueless forever. Sooner or later they'll
discover that Web advertising offers almost no ROI. Only two forms of Web ads
actually work: search ads and classified
ads (such as eBay and real estate listings). A third type of Internet
advertising that might work are video ads, because video is a linear
media form (in contrast to nonlinear website navigation). At this point, we
don't have enough user research about Internet video to say for sure.
