Good summary of why online ads are being reduced:
Yes, the “economy” has a lot to do with it, but it’s a cop out.
The real reasons are simple:
- Social networking advertising is a sham. Do you want to run ads next to a pedophile? How about a she-man? Nope, I don’t.
- Video ads? Come on, YouTube commands a 75% market share and its parent’s CEO and its own CEO admit to being fishing for a revenue model. Nice.
- Search? Google is gouging prices thanks to its “commanding market share” (aka: monopoly), and turning away a lot of revenues in doing so, in order to skim the market from advertisers with deeper budgets and grander ambitions (read: clueless).
Hmm… what else. Oh, yeah, elephant-in-the-room time:
The world’s biggest property, Yahoo!, is being driven into the ground by a clueless President, an out-of-touch CEO and a Board that sold out shareholders - in my personal, humble, biased opinion - for personal gain instead of convince F500 advertisers to migrate online.
The second biggest property, MSN, is pretty much spending all of 2008 trying to convince itself that MSN.com is worthy of ad dollars while it tells Wall Street that it effectively isn’t.
The third biggest property, AOL, is well, being AOL: “please, come work for us… cause tomorrow you might be laid off”.
IAC is blowing itself up… that can’t be too easy for advertisers to embrace and understand…
MySpace - the world’s biggest social networking site - has 99% questionable content and can’t migrate its users fast enough to higher yield pages such as MySpace TV - disclosure: we’re their pushers on that front.
Facebook is finally catching up on reducing the skata that has hampered an otherwise great “utility”.
I wish I could go on, but the point is: online advertising could be bigger, but is being weighed down by our own stupidity… starting with VCs stupidity for investing in crapware. Quick: give me 5 successful VC exits this year?
Right…
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