Fast Company

Print Media Is Dying. Online Revenues Are Tiny. What If the Ads Are to Blame?

The media business is dying. But what if it's not the fault of publishers? What if the crappy state of Internet ads is to blame?

SpongeCell ads

By now, we're all familiar with the gruesome predicament of print media: Print readership is falling, and ad revenues are disappearing as a result. The Web hasn't been any kind of savior, for a simple reason: No matter how good your newspaper or magazine's site is, advertisers still don't pay as much to reach a Web reader as they will for a print reader, to the tune of about ten cents on the dollar. No wonder print publications have been so scared to migrate their businesses online--it's like asking them to move into a shiny new house that happens to be on pile of toxic waste.

But what if it's not all the publisher's fault? What if the crappy state of Internet advertising is to blame?

That was my overriding impression last night at the New York Tech Meet Up, where SpongeCell showed off its latest interactive online ads. Their banner ads don't just sit on a page, blinking dumbly. Rather, they have all kinds of interactive features, right inside the pane--buttons to email the ad contents, watch videos, set yourself a reminder for an event, browse the goods in the picture, even relay them via Twitter. Nothing technically fancy here, just the addition of some useful functionality.

And that's when Ben Kartzman, SpongeCell's CEO, dropped a bomb: Thanks to those simple interactive features, SpongeCell's ads increase click throughs by as much as 70%.

Part of the big problem with getting advertisers to pay for Web ads is that they see the miserable click-through rates and figure, why bother? (It's a mystery why they continue to pay a premium for print ads--the rationale goes that they're more eager to take part in a carefully curated magazine or media outlet.) SpongeCell's figures, if accurate, set off a whole host of possibilities. First, if click-through rates were almost double what they are now, media outlets would be able to charge higher premiums for their ad space.

Granted, the allure of SpongeCell's product falls to zero if they don't deliver better click-through rates--and history tells us that readers become immune to one kind of advertising gimmick after another. But it does make you realize: Banner ads were the bastard product of media companies thinking that they could use basically the same sort of big, boring ad on the Web that they always relied on in print. But that's obviously wrong, because readers don't interact with a browser in the same way as they do with a magazine or a newspaper, taking time to flip through the pages.

If Web advertising's formats were half as clever as all the internet content out there, wouldn't everyone be better off, and making a lot more money?

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40 Comments

  • Cal Gravatt

    the ads are horrid yes and yes they are to blame because idiots make them without thought! simply!

  • Manjit Syven Birk

    People who are sophisticated with social media may seemingly want a richer experience but before one starts dreaming about how to make money here, one should put some mind marbles on maybe educating from the fact that interactive and richer ad media is something that has a user learning curve attached to it, which can involve significant lifestyle involvement. What I do still see is principally industry people conversing with industry people, but who is inspiring the conversation with rich media communities or even prosumers? I had to do a few searches to visually get what Spongecell is trying to do and then I saw how their approach could transform into a worthy conversation and how that would serve to produce a richer set of metrics that includes online app utilization and even meatspace interaction. When I saw that Spongecell braintrust is employing some fine Carnegie Mellon science graduates who are consequently creating this richer form of media and other numerati inspired stuff, then IMHO it may be a bit redundant to ask why print media is failing or if advertising quality is the issue, for then the issue as I see it is goes back to social consumer education, a form of education that should totally redefine the end-user conversation, That goes back to the old saw of "What's in it for me?". The "Me" here isn't social media experts or ad industry insiders, but it's the me as in the social "ME"dia community who with each passing year should through experiential marketing become incrementally more sophisticated as media consumers - for if I "get it" then the media industry will get it also, which becomes a virtuous cycle of attention and not a vicious cycle of media as well as brand proliferation. The concept of the long-tail and its resulting math is something akin to fast food to me - because who are the educational leaders here that changes end-user interactions of what should be ever increasing sophisticated online consumers? Making prettier and tastier online ads would not be a great USP personally for me, when the holy grail seems to be a consumer centric approach (if not smarter interaction), but of course if it is only about clicks, then its still about counting the sheep, which for me is no game changer, but in the immortal words of The Who . . . "Meet the New Boss, Same as the Old Boss". . . M.

  • Jesus Bueno

    The problem has nothing to do with online adds, etc - the print media is dying because they never got the message -- Their value is to meet what customers/clients/consumers want -- which is to get the information almost in real time - and strive, have 100% of their employees buying it; for example I had a subscription with The Wall Street Journal print edition- last year out of 52 weeks - every week I only received 3 to 4 issues out of 6; when I call their 800 number (made at least 15 atempts to fix this problem); their excuse was the delivery issues (missing issues, not enough printed issues, bad weather, etc) had nothing to do with the customer service department - it had everything to do with the printing department. Like the printing and customer service departments were part of different companies.

    This Saturday July 11 2009 - I received my new year 1st issue -- well apparently my subscription began back on Jun/19/09.

    This is precisely the reason the print media is dying, nothing to do with the internet ads -- guess what I do when I do not receive my "daily" issue - I go online and read the information I need. Hopefully they finally get it - their revenues are shrinking because of bad service,

  • Jesus Bueno

    The problem has nothing to do with online adds, etc - the print media is dying because they never got the message -- Their value is to meet what customers/clients/consumers want -- which is to get the information almost in real time - and strive, have 100% of their employees buying it; for example I had a subscription with The Wall Street Journal print edition- last year out of 52 weeks - every week I only received 3 to 4 issues out of 6; when I call their 800 number (made at least 15 atempts to fix this problem); their excuse was the delivery issues (missing issues, not enough printed issues, bad weather, etc) had nothing to do with the customer service department - it had everything to do with the printing department. Like the printing and customer service departments were part of different companies.

    This Saturday July 11 2009 - I received my new year 1st issue -- well apparently my subscription began back on Jun/19/09.

    This is precisely the reason the print media is dying, nothing to do with the internet ads -- guess what I do when I do not receive my "daily" issue - I go online and read the information I need. Hopefully they finally get it - their revenues are shrinking because of bad service,

  • Jesus Bueno

    The problem has nothing to do with online adds, etc - the print media is dying because they never got the message -- Their value is to meet what customers/clients/consumers want -- which is to get the information almost in real time - and strive, have 100% of their employees buying it; for example I had a subscription with The Wall Street Journal print edition- last year out of 52 weeks - every week I only received 3 to 4 issues out of 6; when I call their 800 number (made at least 15 atempts to fix this problem); their excuse was the delivery issues (missing issues, not enough printed issues, bad weather, etc) had nothing to do with the customer service department - it had everything to do with the printing department. Like the printing and customer service departments were part of different companies.

    This Saturday July 11 2009 - I received my new year 1st issue -- well apparently my subscription began back on Jun/19/09.

    This is precisely the reason the print media is dying, nothing to do with the internet ads -- guess what I do when I do not receive my "daily" issue - I go online and read the information I need. Hopefully they finally get it - their revenues are shrinking because of bad service,

  • Jesus Bueno

    The problem has nothing to do with online adds, etc - the print media is dying because they never got the message -- Their value is to meet what customers/clients/consumers want -- which is to get the information almost in real time - and strive, have 100% of their employees buying it; for example I had a subscription with The Wall Street Journal print edition- last year out of 52 weeks - every week I only received 3 to 4 issues out of 6; when I call their 800 number (made at least 15 atempts to fix this problem); their excuse was the delivery issues (missing issues, not enough printed issues, bad weather, etc) had nothing to do with the customer service department - it had everything to do with the printing department. Like the printing and customer service departments were part of different companies.

    This Saturday July 11 2009 - I received my new year 1st issue -- well apparently my subscription began back on Jun/19/09.

    This is precisely the reason the print media is dying, nothing to do with the internet ads -- guess what I do when I do not receive my "daily" issue - I go online and read the information I need. Hopefully they finally get it - their revenues are shrinking because of bad service,

  • Jesus Bueno

    The problem has nothing to do with online adds, etc - the print media is dying because they never got the message -- Their value is to meet what customers/clients/consumers want -- which is to get the information almost in real time - and strive, have 100% of their employees buying it; for example I had a subscription with The Wall Street Journal print edition- last year out of 52 weeks - every week I only received 3 to 4 issues out of 6; when I call their 800 number (made at least 15 atempts to fix this problem); their excuse was the delivery issues (missing issues, not enough printed issues, bad weather, etc) had nothing to do with the customer service department - it had everything to do with the printing department. Like the printing and customer service departments were part of different companies.

    This Saturday July 11 2009 - I received my new year 1st issue -- well apparently my subscription began back on Jun/19/09.

    This is precisely the reason the print media is dying, nothing to do with the internet ads -- guess what I do when I do not receive my "daily" issue - I go online and read the information I need. Hopefully they finally get it - their revenues are shrinking because of bad service,

  • Jesus Bueno

    The problem has nothing to do with online adds, etc - the print media is dying because they never got the message -- Their value is to meet what customers/clients/consumers want -- which is to get the information almost in real time - and strive, have 100% of their employees buying it; for example I had a subscription with The Wall Street Journal print edition- last year out of 52 weeks - every week I only received 3 to 4 issues out of 6; when I call their 800 number (made at least 15 atempts to fix this problem); their excuse was the delivery issues (missing issues, not enough printed issues, bad weather, etc) had nothing to do with the customer service department - it had everything to do with the printing department. Like the printing and customer service departments were part of different companies.

    This Saturday July 11 2009 - I received my new year 1st issue -- well apparently my subscription began back on Jun/19/09.

    This is precisely the reason the print media is dying, nothing to do with the internet ads -- guess what I do when I do not receive my "daily" issue - I go online and read the information I need. Hopefully they finally get it - their revenues are shrinking because of bad service,

  • Jesus Bueno

    The problem has nothing to do with online adds, etc - the print media is dying because they never got the message -- Their value is to meet what customers/clients/consumers want -- which is to get the information almost in real time - and strive, have 100% of their employees buying it; for example I had a subscription with The Wall Street Journal print edition- last year out of 52 weeks - every week I only received 3 to 4 issues out of 6; when I call their 800 number (made at least 15 atempts to fix this problem); their excuse was the delivery issues (missing issues, not enough printed issues, bad weather, etc) had nothing to do with the customer service department - it had everything to do with the printing department. Like the printing and customer service departments were part of different companies.

    This Saturday July 11 2009 - I received my new year 1st issue -- well apparently my subscription began back on Jun/19/09.

    This is precisely the reason the print media is dying, nothing to do with the internet ads -- guess what I do when I do not receive my "daily" issue - I go online and read the information I need. Hopefully they finally get it - their revenues are shrinking because of bad service,

  • Jesus Bueno

    The problem has nothing to do with online adds, etc - the print media is dying because they never got the message -- Their value is to meet what customers/clients/consumers want -- which is to get the information almost in real time - and strive, have 100% of their employees buying it; for example I had a subscription with The Wall Street Journal print edition- last year out of 52 weeks - every week I only received 3 to 4 issues out of 6; when I call their 800 number (made at least 15 atempts to fix this problem); their excuse was the delivery issues (missing issues, not enough printed issues, bad weather, etc) had nothing to do with the customer service department - it had everything to do with the printing department. Like the printing and customer service departments were part of different companies.

    This Saturday July 11 2009 - I received my new year 1st issue -- well apparently my subscription began back on Jun/19/09.

    This is precisely the reason the print media is dying, nothing to do with the internet ads -- guess what I do when I do not receive my "daily" issue - I go online and read the information I need. Hopefully they finally get it - their revenues are shrinking because of bad service,

  • Jesus Bueno

    The problem has nothing to do with online adds, etc - the print media is dying because they never got the message -- Their value is to meet what customers/clients/consumers want -- which is to get the information almost in real time - and strive, have 100% of their employees buying it; for example I had a subscription with The Wall Street Journal print edition- last year out of 52 weeks - every week I only received 3 to 4 issues out of 6; when I call their 800 number (made at least 15 atempts to fix this problem); their excuse was the delivery issues (missing issues, not enough printed issues, bad weather, etc) had nothing to do with the customer service department - it had everything to do with the printing department. Like the printing and customer service departments were part of different companies.

    This Saturday July 11 2009 - I received my new year 1st issue -- well apparently my subscription began back on Jun/19/09.

    This is precisely the reason the print media is dying, nothing to do with the internet ads -- guess what I do when I do not receive my "daily" issue - I go online and read the information I need. Hopefully they finally get it - their revenues are shrinking because of bad service,

  • Riccardo Barbieri

    "Part of the big problem with getting advertisers to pay for Web ads is... " that people just don't want to be bothered by advertisements and to have their privacy invaded, be distracted or interrupted.
    Maybe the click through rate is the first time ever really tangible result of how much attention people actually pay to publicity. Most surely they would actually pay more attention if there was less publicity.

  • Riccardo Barbieri

    What if people are just fed up with the overkill of publicity, by any kind of media? What if it doesn't matter anymore WHO or WHERE publicity done, because at the end all publicity says the same: BUY BUY BUY.
    However, I have a proposal to get more income from publicity, not for the publishers though, but for society as a whole! It goes like this: Multiply TAX on PUBLICITY (2x, 3x,..)
    You can find it at:
    http://www.thepetitionsite.com...
    and you are free to sign it!

  • Michael Lum

    So much is made of changes in advertising, in finding new ways to convince people to buy stuff by creating messages that are more personal, interesting, and relevant. But is it possible that part of the decline is simply because people don't need as much "stuff"? It feels like we are saturated with ads, saturated with deals, and 99% of the time will tune out an ad the moment we realize it's an ad.

    I guess it goes back to the indisputable trend that getting and holding people's attention is getting more and more difficult.

    --
    My Blog on Society/Technology:
    http://www.mikailum.com

  • Colin Doody

    The most important line of information this group should be following is the dollars being spent on ecommerce, currently going through double digit growth. The more Best Buy, Nike, MSFT even Dominos sees revenue increase via digital, the more their marketing team will push budgets. With more revenue tied to this medium creativity, placement, and engagement will improve. If anyone saw Jason Kilar (Hulu's) speech at Ad:tech he argues online, today, is getting a larger piece of the pie then they should based on consumer usage. As both usage and transaction continue to grow online the advertising industry will follow.

  • Tony A

    This is very cool. I've even seen some new media companies adding commerce to banner ads. Checkout www.alvenda.com. They've basically converted banner ads into checkout-enabled storefronts for some very large retailers.

  • Sheena Medina

    @Dan I think you raise an interesting point. Are your ideas about what's going on in the media landscape now based on keen observations or is there some research out there, that you know of, to back it up? My real curiosity rests in your dismissal of advertising on the web as "simply a horrible business model." Couldn't you argue that we are really in our infancy when it comes to the Internet and technology in general?

    I'm not sure that the laws that govern the media landscape are in fact dictated by abundance or scarcity. I think we are all still trying to figure it out.

  • Tyler Adams

    @Nik Thanks for the info. Seems like Spongecell is doing some very interesting things. This is certainly something to look into. Much appreciated!

  • Nik Bønaddio

    @Tyler Adams:

    You can measure this by looking at metrics at the second level. Spongecell (It feels not writing we..) has a very rich metric and data collection platform, one where we can track the conversion rates to n number of levels, such as how many people actually buy something after clicking on an item in the product carousel. Tracking this conversion allows them to differentiate between "interested" actions and "curious/tell me more" actions - the former obviously much more valuable.

    Using these metrics and predictive models to how various actions might in theory perform allows a flexible pricing system; imagine pricing based solely on completed actions, or on total interactions in general, or whatever n-level metrics you'd like.

    Hope that helps!

  • Harry Otsuji

    To continue:
    5. The media elite talk only to themselves, live in neat boxes, and haven't a clue of what's going on in the real world

    If the newspaper industry disappears, just think about the number of trees which would be saved. This would make their green environmentalist buddies happy.

    Faithfully yours,
    /s/ Harry H. Otsuji