I had lunch yesterday with my old friend and former colleague, Chip Bayers, who, 15 years ago this week, after having left my fledgling Internet business in New York, helped start HotWired in San Francisco. This is significant because advertising on the Internet started with HotWired’s launch and because it started with the banner ad, invented by
Wired’s editor and founder, Louis Rossetto, and because advertising on the Internet is still dominated by the banner ad, which has never worked all that well.
In fact, this very development which, 15 years ago, launched the Internet revolution is now threatening to stop it in its tracks. Or, anyway, the fact that, beyond search ads, lame excuses for advertising, there has been no meaningful development of Internet advertising forms, acumen, or performance.
I bring this up not just because of my pleasant lunch or because Internet CPMs (what we get paid for a thousand views) continue to fall through the floor, but because Google has announced a new free GPS system which you’ll be able to use on your phone. Google is saying that this nifty service, all the niftier because it is free, will probably be supported by an advertising model.
What we have here is a perfect example of the great Internet advertising paradigm: Make something nifty, make it free, get a lot of people to use it, and then sell some ads around it, although, because we are technology people, and have never seduced anybody, we really don’t know how to create effective advertising.
This is okay for Google, which figured out that it could make money even off of advertising that doesn’t work very well, because it was the only game in town. But it has been terrible for people trying to move merchandise, and even worse for everybody else on the Internet trying to exist off of what was left after Google took its cut of the ever-shrinking CPM pie.
In other words, 15 years after it all began here we are in an advertising-driven business in which no one has really figured out how to get the consumer’s attention and call him or her to action. I’d argue that they haven’t figured that out because they haven’t thought about it very much. Rather, they’re thinking about functionality—how to make the technology do quite amazing things—rather than about how to sell stuff.
In addition to not being people who have much interest in making an emotional connection, technology people, I believe, rather look down on the idea of advertising and its smooth-guy practices. Advertising people, for their part, know nothing about technology. So, if the technology people can’t get advertising to work because they don’t do salesmanship, ad people can’t get Internet advertising to work because they don’t do technology.
That, 15 years later, still stuck with the banner ad, is the fix we are in.
More of Newser founder Michael Wolff's articles and commentary can be found at VanityFair.com, where he writes a regular column. He can be emailed at michael@newser.com. You can also follow him on Twitter: www.twitter.com/NewserColumns.
