Advertising

Ads Are The Cost of Doing Business Online

Warning: rant ahead. Nick talks about conversational advertising, one of the alternatives to regular advertising that some bloggers are trying out. The one thing that we constantly have to remind ourselves is that there really is no such thing as free anything. Advertising has to appear in some form. Everything costs something, somehow, sometime, somewhen. You may not pay for something directly or even in cash, but you will pay in some way. Sometimes it’s in cash, sometimes in reciprocal activity.

So let’s ask ourselves, what do advertisers want? Our cash, yes, but first they want our eyeballs (and ears for radio), and they’ll pay to get it. It’s always been that way. Early on in the history of TV, not every business person believed TV ads were worth it. But eventually, they realized the hypnotic power of TV, and the influence in purchasing decisions. TV is still the most expensive medium out there (but feel free to correct me if I’m wrong), because of the immense cost of doing business.

Of course, the Internet has had a similar effect, but which is still in its infancy. The right form of advertising online doesn’t exist, in my opinion. There are always some people who won’t like advertising, but it’s a cost associated with the distribution of any kind of information or entertainment. Even public TV broadcasting caved in North America, and to survive, allowed a few minutes of commercial advertising per hour.

While shows like Firefly or others just may be able to swing the production costs of an entire season just by pre-selling a future DVD collection, not everyone is going to manage this. When I was publishing my book/ film/ music review magazine, someone in the publishing industry once told me that some of the “best” books ever written would probably never see print (i.e., distribution). He’d taken upon himself to set up his own imprint and publish one or two quality literary hardcovers per year, when he could afford it, and whether or not he’d make a profit. (He would at least break even, but he had to maintain a high-paying job to manage this act of altruism.)

I did the same thing with demo tapes of select young bands that came to me and asked for a helping hand. This was after my print magazine folded, simply because I just didn’t have time to go sell ads, and couldn’t trust any of my ad people to do anything other than spend my money on lunch and parking. I struggled through 2 years of booking bands, putting on shows, paying for demo tapes, posters, stickers, and so on. Ultimately, the market didn’t support it, because during a time of recession, young people would rather pay $10 to listen to a half-assed, snotty DJ play tunes they’re familiar with than go see a new, talented but raw band for $5. That’s life, and you have to work around that, be innovative, or find something else to do.

So what’s the problem on the Internet and with everyone who thinks that blogs and websites and RSS feeds, and what have you, shouldn’t have advertising? Arguably, it’s the current generation raised from a very young age on the Internet who have been able to get so much for free, whether by hook or by crook, and believe that everything should be free and that they shouldn’t have to do anything in return. You know who you are. Nothing free can be sustained for long.

Sorry, but this just isn’t possible, and if you think otherwise, you’re delusional. That includes everyone who says that RSS feeds should be full-text. The bandwidth costs are too prohibitive for most small publishers, especially those whose sites or feeds aren’t yet earning what their content warrants. And in the case of full-text RSS feeds, far too many subscribers update their feed folders multiple times per day when it’s unnecessary. I won’t do the cost breakdown, but it’ll be prohibitive for most publishers.

It’s all very easy to say that if their content is any good, they’ll eventually earn money. The fact is, it’s easy to forget that money is simply a symbol, not the entity we’ve made it out to be. It’s representative of a transaction that’s happened or about to happen. That means that for my offering you a service, you must reciprocate in some way, whether it’s to buy something from me, or from someone else who in turn buys something from me, or by simply lending my sponsors your eyes (or ears). There really isn’t any other way around this.

I’d love to be able to offer you all of my blogging at no cost, but for the service I offer you (those that read my blogs), I have to somehow earn compensation, or throw in the towel. Unfortunately, online advertising has a ways to go before it reaches a maturity level and form that’s acceptable to the majority. But how exactly does that happen with a billion people online? That’s the question that has to be answered, obviously.

Oh, and while I’m ranting, for Robert Scoble and all of you who want full-text feeds at no cost, in subscriber fees or advertising, I say to you, learn how to use a feed reader properly. All it takes is one damn click extra to see the rest of an excerpted story. Are you that lazy? And to all of you online publishers b*tch*ng about your blogs or feeds not getting click-through to your permalink pages, write better titles and opening paragraphs ;>

Author: Raj Dash

7 thoughts on “Ads Are The Cost of Doing Business Online

  1. Nick and I use our laptops while travelling, both fully loaded. The main difference between us is Nick has started to use his laptop more and more as his main machine whereas I still have my desktop as my everyday pc. This means while I am on the road I use a web based aggregator (the web version of attensa) which syncs with my desktop one. At home I will check my rss all day, it updates once an hour into my outlook email client, but when travelling I check once in the morning if I am lucky.

    My next trip is april but right now Nick is away on performancing business, he has been in New York and will now be in SF. I am holding the fort back here in merrieoldengland.

  2. …but how on earth do you expect to get the average user to use a feed reader properly? Forget it. People will use feed readers however the hell the want whenever the hell they want. And if they want to reload their feedreaders ever twenty seconds, that’s what they’ll do, and be damned the cost to you or themselves or anybody else.

    And if they don’t want to click the “more” link they won’t do it. I sure as hell don’t, and any publisher who wants my clicks has approximately 4 options:

    1. Reference previous posts of yours within your posts (Engadget is famously good at this)…
    2. Make me pay for your wonderful content (I likely won’t do it, but you can try it anyway)…
    3. Put ads in your RSS feed (I have never once clicked an ad in an RSS feed, but you don’t need everyone to click for your campaign to be a success)
    4. Stop whining, ranting, and disparaging your readers/customers, or they will make you pay, Chester.

    I use a feed reader precisely because it is a feed reader. I do not want to click out of the reader, so I sort of resent having partial text in the newsfeed. I tend to unsubscribe from incomplete feeds. And I don’t care if I’m using your RSS bandwidth (or feedburner’s or anybody else’s). I’m the customer. I’m the reader. You make me happy or I walk away. You either want me to read you or you don’t. The important thing is that you have something of value for me, and that whatever you make me pay (ads or clicks or views or listens or whatever), it is commensurate with what I take away from your content.

    Having said that, I feel as if I’ve spent way too much time responding to this post. Good grief. Where are my priorities?

  3. So that the publisher can specify where a partial feed ends, so that the consumer, if they turn on that feature, will only see the summary.

    WordPress, for instance, only allows a global full feed switch. Why don’t we have an option to publish both the full and abbreviated feed, so the consumer can choose which to subscribe to?

    Finally, WordPress and FeedBlitz’s partial feeds truncate at a hard limit of so many words or characters – if I were publishing a partial feed, I’d want to specify a cut at the –more–.

  4. Michael, you’re right. I honestly did forget about the feedburner aspect – how embarrassing However, there is still the issue on the other end, which I of course failed to mention in my post. According to what I’ve seen written in the blogosphere, and the research I’m doing re RSS metrics, people do update their feed readers multiple times per day when it’s unnecessary.

    If Feedburner’s being used, then the publisher doesn’t suffer. But the subscriber does incur a bandwidth cost, and it’s especially expensive from a mobile device.

    Speaking of which, Nick, if you’re reading this, you’re on the road right now, right? I think Chris is as well. Are you guys still reading the RSS feeds you’re subscribed to, on your mobile devices? Full- or partial-text? Both? Are you concerned about the costs?

    Andy’s right in that many of us frequenting Performancing probably don’t have to worry yet about our publishing bandwidth. But we all probably want to get there Now wouldn’t it be a bad precedent to set up full-text feeds then withdraw them later? It is more than possible, especially in the blogosphere, for a site to become popular without proportional earnings. It happens. (I’m always about worst-case scenario, being a programmer and all. Maybe it’s a negative way to look at life.)

    Consider this fake example, from a subscriber’s point of view. You subscribe to 100 feeds of 20 full-text items daily of 3K per item. That’s only 6Mb/d, or about 180 Mb/m (one update/day). Not so bad. But the maximum plans I’ve seen (at least in Canada) for a mobile device only allow 250 Mb/m. If you are a journalist (or whatever) and are on the road lot, you’d benefit most by subscribing to RSS feeds.

    Now if you wanted to increase your subscription count, you couldn’t on some plans because of the bandwidth cap. On other plans, it would presently cost $0.25/Mb. I’m saying that the partial-text experience isn’t so awkward as some people are making it out to be

    I suppose what it all comes down to is that some publishers may want to consider offering two sizes of feed. But at some point, the full-text feeds will cost money somehow. Surely Feedburner cannot forever afford to foot their bandwidth bill?

  5. Raj I think you hit some nails on the heads, except for one thing — does anyone really worry about paying for bandwidth?? I WISH my sites got enough traffic to worry about that 🙂

  6. It’s like publishing business in real life.

    1. You have to sell copies to get readers.
    2. You have to sell ads to make copies affordable to readers.

    Statement number one is the conceptual problem with pro blogging.

    Any comments about how to solve that (again)?

  7. Are people really worried about the bandwidth of full-text RSS feeds? I would think the bandwidth cost is negligible for most, and for the rest, a free FeedBurner account will absorb all of your bandwidth costs for free.

    I’m a big fan of full-text feeds. I know how to use a feed reader properly and I’ll happily click through to a full story if I have to. But I’d much rather read the story in my nice comfortable Bloglines environment, and if it’s really big or really important, I’ll usually click through anyway. If it’s really good, I’ll click through, bookmark it, post it to del.icio.us, and blog about it.

    I do think unlimited-access full-text feeds are doomed, but that’s because of plagiarism by thousands of spam sites, not the cost of bandwidth…

    Unfortunately, online advertising has a ways to go before it reaches a maturity level and form that’s acceptable to the majority.

    It’s easy for bloggers to think online advertising is in its infancy, but I’ve been making money through sites with advertising since 1996. The market has actually reached a maturity level: Look at cnn.com, myspace.com, and other popular sites. (Google.com comes to mind.) They all have advertising, and the majority finds it quite acceptable.

    It’s just a small cross-section of geeks and bloggers who find all advertising unacceptable. Most people are just fine with advertising until it goes overboard.

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