However, the independence and control the Web offers, is not the only driving force. Ramachandran 2004 identifies that we are intensely social creatures. So the challenges of social life in reality compel the expansion of the primate brain. For instance the presence of rules, actions and consequences, incites a feeling of repressiveness especially in young people; boredom evokes restlessness, forcing people to identify with anything that offer a form of escapism. The Web became a ready answer, and the extent of reach and the ability to navigate so effortlessly makes it ‘the perfect place to be’. Facebook as a service, if nothing, is curbing people of boredom. The addiction that has resulted from such services perhaps mirrors their value, and no doubt presents an opportunity for businessmen. Therefore, the ‘information bombardment’ on the Web is akin to the marketplace-madness that is competition. It is the era of the free-markets. And the Web offers one advantage that companies in free-markets pine for – the absence of rules and regulations. The web is nothing more than a remodelling of the real world, and holds a perpetual enticement as long as the barriers to entry remain low.
Businesses are major benefactors of the Web fad. It is not a secret that commercial interest – mainly represented by a large stream of advertising dollars – was a core element responsible for funding and sustaining the growth of online applications, communities and services. As a result, online advertising is often criticized for supplying the vast development of online applications, most notably social networks which became the engine of behavioural targeting. The idea was simple; get as many users as you can, encourage them to share their lifestyle, habits, behaviours and attitudes and use these to precisely target various segments with relevant advertising messages. Despite the ethical controversy surrounding the topic and the criticisms of privacy violation, there is another reason why businesses should rethink online behavioural targeting: efficiency.
According to one of the major online advertising agencies, Adteck, the average click through rate declined from 0.34% by 2004 to 0.19% in 2008, a trend that was based on more than 10 billion web inquiries (Adteck 2009). Similarly, Business Week (2006) reported a drop of 70% in the Click through Rates for Microsoft, Yahoo and AOL during 2006. According to many scholars (e.g. Yan et al 2009 and Goldsmith and Lafferty 2002), highly targeted ads may generate a click through rate of 0.7%, which is still low compared. Thanks to pay per click mechanisms, advertisers do not need to worry about the Click through Rate, but the essential question here is what would be the future of online advertising? With the increasing decline in click through rate, are we training users to simply ignore advertising messages online? A study conducted by Goldsmith and Lafferty (2002) found a very low recall rate for online advertising compared to other media tools such as TV, Magazines, Newspapers and Radio. Considering the previously mentioned trends, one scenario that is likely to happen is a further drop of click through rates to zero levels and the failure of online campaigns in meeting the advertiser’s targets. Such scenario basically means the end of online advertising and probably the stoppage of funding for most online service and social networks such as Google, Facebook among others and probably the end of the internet as we know. Some people actually think that the decline in online advertising efficiency may lead to a new era of paid internet access.
A sordid future is presented in the study given the spate of addiction that services like Facebook has sparked. The question of whether Facebook makes friendships meaningless is misplaced. Facebook and services like it do not make choices for people; they simply offer them a platform. True. we are inundated daily by more information than we can deal with; however, they all add up to one thing –‘more choice’.
REFERENCES
Ramachandran, V. (2004) Neuroscience - the New Philosophy, BBC Lectures [Online] Available from
http://www.bbc.co.uk/radio4/reith2003/lecture5.shtml (3/03/10)
Goldsmith, R. and Lafferty, B. (2002) Consumer response to websites and their influence on advertising effectiveness, Journal of Internet Research: Electronic Networking Applications and Policy, 12(4), 318-328
Adtech 2009, Adtech 8th Newsletter [Online] Available from [http://www.adtech.com/edition_no8_int/newsletter_Feb09_CTR.htm] (02/03/10)
Business Week 2006, So Many Ads – So Few Clicks [online] Available from: http://www.businessweek.com/magazine/content/07_46/b4058053.htm (03/03/10)
Yan, J., Liu, N., Wang, G., Zhang, W., Jiang, Y. and Chen, Z. (2009), How Much Can Behavioural Targeting Help Online Advertising, Madrid: WWW 2009
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5 comments:
true the internet advertising world is changing but it does not have to come to an end humans are creative and will always innovative ways to use the internet for advertising
Yes, the world might turn it's face to another means for advertising,networking etc, that doesn't render the existing ones useless..it only means, times have moved towards seeing other ways to get the job done, so more work has to be put into catching up with the trend.
It is true that humans are creative and will innovate ways to advertise on the internet, however, advertisers will not tolerate to wait until a solution is provided and they might shift to other advertising channels. If this happened, the consequences on the internet will be devastating
it is veritable that the purpose of internet advertising is declining. however, judging by the per click rates may leave out customers that are informed about a certain product and did not click. the point is information is passed. Though this may be a nonfactual, or had to prove.
on the other hand, it makes no sense investing in what wouldn't not yield returns. hence i project a decline in enhanced networking and customer related sites in the near future, however, the companies could finance based on community responsibility or for brand recognition. a sift to other advertising medium will just 'zap' the life span of the present present system.
This is an interesting post. However, I think that the projection of online advertising's demise may be a tad pessimistic. The 2002 study by Goldsmith & Lafferty appears to be outdated. I believe online advertising has evolved to include the use of more creative and sophisticated techniques over the recent few years. 'Rich media' ads combine animation, video and sound to display interactive features that are many times more appealing to users compared to conventional static ads. Not only such ads are more likely to increase click-through rates, but they also have the potential to help e-marketeers achieve their branding goals of brand awareness, brand favorability and most importantly, purchase intention. A study on this has been done by Google in 2009 - http://www.webpronews.com/topnews/2009/06/23/google-analyzes-rich-media-ad-effectiveness
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