http://www.techcrunch.com/2009/03/22/why-advertising-is-failing-on-the-internet/
Not sure how many are following the debate that is raging on this, but overall it does have huge implications for services we take for granted today. It started with a guest post by Wharton professor Eric Clemens<http://www.wharton.upenn.edu/faculty/clemons.html>. Techcrunch then invited one of the more fierce responders (*Danny Sullivan, the editor-in-chief of SearchEngineLand <http://searchengineland.com/>)* for a healthy debate sans all the fury in his initial retort. The debate is so far is below: http://www.techcrunch.com/2009/03/28/steel-cage-debate-on-the-future-of-online-advertising-danny-sullivan-vs-eric-clemons/ Would love to hear what the list has to say on this. *1. There Must Be Something Other Than Advertising:* The expected drop in internet advertising revenues<http://www.techcrunch.com/2009/03/22/2009/02/25/online-ads-even-the-evangelists-turning-bearish/>this year was neither unpredictable nor unpredicted, nor was it caused solely by the general recession and the decline in retail sales. Internet advertising will rapidly lose its value and its impact, for reasons that can easily be understood. Traditional advertising simply cannot be carried over to the internet, replacing full-page ads on the back of The New York Times or 30-second spots on the Super Bowl broadcast with pop-ups, banners, click-throughs on side bars. This might be a subject where considerable disagreement is possible, if indeed, pushed ads were still working in traditional media. Mostly they have failed. One newspaper after another is going out of business across the United States, and the ad revenues of traditional print media, even of highly respected magazines, is declining. The ultimate failure of broadcast media advertising is likewise becoming clear. Pushing a message at a potential customer when it has not been requested and when the consumer is in the midst of something else on the net, will fail as a major revenue source for most internet sites. This is particularly true when the consumer knows that the sponsor of the ad has paid to have this information, which was verified by no one, thrust at him. The net will find monetization models and these will be different from the advertising models used by mass media, just as the models used by mass media were different from the monetization models of theater and sporting events before them. Indeed, there has to be some way to create websites that do other than provide free access to content, some of it proprietary, some of it licensed, and some of it stolen, and funded by advertising. The idea that content has a price and net applications should find ways to earn a profit without providing free access to other people’s content gets explosive reactions; when virtual reality pioneer and tech guru Jaron Lanier suggested in a New York Times Op Ed<http://www.nytimes.com/2007/11/20/opinion/20lanier.html>that authors deserved to be paid for their content he actually received death threats. But other models are possible and several suggestions for alternative forms of monetization are offered below. ..... (The article is quite lengthy and you should read the comments to fully appreciate the storm it has created, so I'm not posting it in entirety, just the first point made by Prof. Clemons) Kiran
