kidmercury

From Ad Age:

The number of people online who click display ads has dropped 50% in less than two years, and only 8% of internet users account for 85% of all clicks, according to the most recent "Natural Born Clickers" study from ComScore and media agency Starcom. As the pool of people who click on banner ads rapidly decreases, it begs the question: Is the long-used click-through rate now officially useless?

Search marketers have known this for a while. Most people don't click on ads. Those who do tend to fall into two categories: (1) shopaholics who enjoy spending money and thus merrily go about clicking ads and buying things or (2) stupid people who don't know it's an ad.

Bottom line: banner advertising doesn't work. At least not very well, that is.

The real problem with so many Internet businesses is the belief that the Internet enables everything to be tracked, and that because of this, you can make you ad spend totally precise and efficient. This analysis, while idealistic and heartwarming, is a bunch of bull. Consider:

1. The Internet doesn't fully track word of mouth -- i.e. you clicking on an ad, getting directed to a cool web site, emailing this cool web site to your friends, verbally talking about it with your friends, etc.
2. Tracking is not a perfect science. In other words, just because your analytics program said 100 people came to your site, that doesn't necessarily mean 100 people came to your site. It could be 105. It could be 97. It could also be 500. Tracking is off and the margin of error is high. This is a big deal.

Folks think the Internet is all about immediate transaction sales. You know, like there's a book or a home repair tool you've been meaning to buy, you know exactly what you want, so you just head on over to Amazon and place your purchase. A few days later, it arrives at your door. Perfect!

But the Internet is really about social media and relationships. Relationships are about trust. Trust leads to sales, particularly for expensive products/services with high profit margins.

Trust is what merchants need, but it's not something that can be tracked and quantified and easily purchased via an advertising campaign.

Personally, I think a big part of the future of advertising is going to be finding models that help advertisers earn trust. This is going to require advertisers, publishers, consumers, and ad networks to have a very different mentality. But I remain convinced that this is the biggest immediate opportunity on the web today.

Unregistered

I was wondering what your experience has been for conversion rates when someone clicks on an ad for your music. I am going to run some banner ads to sell my music, when someone clicks the ad they will be directed to the album in iTunes. I have not been able to find any numbers of how other peoples ads perform, and I am just trying to get together a budget for this ad campaign.

Thanks a lot.

kidmercury

i've only run ads for my music on youtube. i've written a bunch of songs about/for popular musicians, and then i advertised that song on youtube when folks do search queries for that musician. i did the same thing with last.fm.

generally this did not do much. i got more views for my videos, but not really more youtube subscribers, and not more music sales. the best experience was with my songs for jason mraz and aimee allen, which managed to get me some links from some mraz fans on the web.

the majority of my sales have come from folks searching iTunes for a popular musician i've written a song about, and then buying my song. doing cover songs on youtube have helped a bit as well.

hope that helps.

Unregistered

Yes, that does help. I have heard that covers do well for that reason, when people search the original artist they run into the cover artist.

YouTube is an idea I haven't really thought about using as an advertising tool. Thanks, I think I'll look into it.