Are ads failing on the Internet?

Eric Clemons, Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania, wrote a compelling article on TechCrunch about the demise of online advertising.  This post touched a nerve judging by his response to his critics:

OK, guys.  It’s time to calm down.  I did not insult you, your families, your religions, or your Rottweilers.  I may have presented a message you did not want to hear.  Let me summarize it again, for those of you who appear to have commented on it without reading it:

  • Online advertising cannot deliver all that is asked of it.  It is going to be smaller, not larger, than it is today.  It cannot support all the applications and all the content we want on the internet.
  • And don’t worry. There are other things that can be done that will work well. If you disagree with me, it would be helpful to think about the basic premises of the article and to refute them:
    • People don’t trust ads.  There is a vast literature to support this. Is it all wrong?
    • People don’t want ads.  Again, there is vast literature to support this.  Think about your own behavior, you own channel surfing and fast forwarding and the timing of when you leave the TV to get a snack. Is it during the content or the commercials?
    • People don’t need ads.  There is a vast amount of trusted content on the net.  Again, there is literature on this.  But think about how you form your opinion of a product, from online ads or online reviews?
    • There is no shortage of places to put ads.  Competition among them will be brutal.  Prices will be driven lower and lower, for everyone but Google.
  • While I’m not sure if, “advertising will fail,” I do know that I hate those pop-up online ads that are deliberately hard to close.  Every time I’m interrupted by one I either ignore it or curse it.  On the other hand, banner ads and click-throughs on side bars are far less intrusive and, perhaps, more effective.  

    So if the internet isn’t meant to push content solely in one direction the way TV and radio does, how will ads evolve to connect with people? Only time will tell.

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