Does Ad Blocking Hurt Good Websites?

An interesting post over at ARS Technica about how ad blocking hurts websites. The post is interesting for two reasons. First, the article, written by ARS Technica’s founder and owner, goes into more detail than is often the case regarding how ad supported websites work and how blocking those ads can hurt the website in question by depriving it of the revenue it requires to keep running. Second, the article mentions a "failed experiment" in which they blocked users who were blocking ads from viewing the site’s content.

The article, which I highly recommend you read, mentions an oft misunderstood concept about online advertising, namely, that all website advertisements pay per click. While, it is true that numerous popular advertising programs, such as Google AdSense, pay content publishers, or website owners, on a per click basis for some ads, that is not always the case. Even within the AdSense program, there are advertisements that pay based on "impressions", or how often they are seen. However, for low-traffic websites, these amounts never show up as anything more than a penny here or there. For these website owners making money with AdSense means pay per click.

Because there are many more low-traffic web properties than there are high-traffic properties, and because those same numerous low-traffic websites write more about ad programs than higher traffic websites, they’re experiences and opinions are more widely disseminated. The result is that most people believe that only clicking on ads generates any revenues, and since they aren’t going to click on ads anyway, blocking them causes no damage to websites.

High Traffic Websites Earn Revenue Just By Showing Ads No Clicks Required

However, on a high-traffic website, such as ARS Technica, advertisers often pay based not only based on clicks, but often based on the number of impressions the ad generates as well. The most common standard advertising rate in this arena is based on one-thousand impressions, which is often notated as CPM (Cost Per Thousand). This is occasionally misunderstood as cost per million based on the erroneous assumption that M stands for a number that starts with M, when, in fact, it is the Roman numeral M which is 1,000. (You see the M all the time in movie credits that use Roman numerals for their dates.)

For example, a high-traffic website might get $1.00 for every 1,000 impressions. In other words, for every 1,000 times an advertisement is displayed, the website would get $1.00. (These numbers are all for example purposes only and do not necessarily correlate to real advertising numbers, rates, costs, or payments.) If the website in question gets 200,000 page views per day, that would add up to $200 per day of revenue. Over the course of a month, that is $6,000 which adds up to a nice $72,000 per year.

Even at that rate, you aren’t talking about a full-fledged publishing business with employees and benefits and the like. To get to those kind of numbers, you either need higher rates, or more traffic. Either way, you can see why the number of people with actual real world experience in this area is low. A site like ARS Technica get upwards of 10,000,000 page views per day, according to Alexa.

Re-do the math and you can see the kinds of numbers we are talking about here.

So, when a site like this notices that 40% of its users are blocking ads from being displayed, it isn’t just nickels and dimes we are talking about.

Ad Supported Websites Block Users Who Block Ads

Also in the article, the author talks about what he calls a failed experiment whereby the company kept users who used ad blocking software, most likely the Ad Block Plus plug-in for Firefox and others, from seeing the content on the website. Unfortunately, one of the major problems with the experiment was a lack of communication with the readers to let them know what was going on.

The other problem is that a certain subset of user populations is fanatical in both their efforts to block ads and their "right" to do so. Needless to say, there was some backlash.

But, did some good come out of all this?

I set my Firefox Ad Block Plus plugin to Disabled for the arstechnica.com domain. We’ll see how it goes. I’m perfectly willing to let websites display ads to generate the revenues required to continue their efforts. I am not, however, willing to let those ads slow down my browsing experience, and I am also not willing to let them be overly intrusive. I installed ad block plus when Kontera and its ilk came out and started manipulating text to have links that popped up ads if you so much as got your mouse close to them. That is unacceptable.

Furthermore, I am NOT going to unblock Flash on ARS Technica or any other website. Flash is a horribly bloated coding system that just gets worse by the day. Open a webpage with a few flash based ads on it, and watch your browser’s memory usage double. Since I like to leave tabs open while I do other things, those resource pig flash ads take up more and more system resources and that is not acceptable.

More interestingly, for the time being anyway, I have in the back of my mind the thought that some of my favorite websites (I read ARS Technica a lot whether directly or via RSS Feed) need to have those ads display to keep running. Otherwise, they’ll either disappear, become lower quality, or stoop to writing pay for review or pay for coverage articles.

Google Buzz Gmail Fails Against Facebook & Twitter

google-buzz-facebook-failure Google’s recent attempt to crack the social networking market comes courtesy of an ill-conceived service titled Google Buzz. The idea is that that Buzz provides similar status updates, and shared links, and so on, right inside of your Google email account. Of course, it is this very concept that dooms Google Buzz to failure, and casts a wide shadows of doubt upon the company’s once legendary ability to understand what users want and deliver useful innovation to the web.

Google Buzz Flaw

The primary flaw with Google Buzz is, ironically, the feature that the company is most proud of, it’s tight integration with Google Mail.

The privacy advocates have thrown up a hundred red flags as Google rolled out Buzz, and the company seemed a bit unprepared for the backlash. More tellingly, it seemed to be completely caught off guard by the problems that were pointed out, as evidenced by the numerous changes it made to the platform just days after it was unveiled.

The only explanation is that Buzz was built by Google, inside of Google, by Googlers, who are advanced and dedicated users of all things Google. This isn’t necessarily a bad thing, except for when that it means that "within Google" is no longer in sync with the world outside of Google. Of course, a ten-year Google employee has no problem linking together all of his Google services. He’s probably been doing it through other means for years. Likewise, he is only too happy to have another way for friends, family, and co-workers to find all of this stuff that he put out there on the Internet for all to see.

However, out here, in the 99.99999999% of the world that is not inside of Google headquarters, we have lives that are not universally linked. Most people have families, friends, co-workers, co-workers who are friends, colleagues who are acquaintances, but not necessarily friends, bosses, ex-girlfriends, and ex-boyfriends, and ex-wives and ex-husbands. Some of us have kids, grandkids, and great-grandkids. Likewise, some of us have parents, grandparents, and maybe even great-grandparents. For each of these groups of people, there are undoubtedly sub-groups, ranging from conservative to liberal, political to non-political, religious and not, those who enjoy British humor and those who think it is stupid, and on, and on, and on.

The point of all this is that in our lives we are not interested in blending all of these layers together. The Wednesday drinking buddy would laugh hilariously as the cartoon we found, while the dad from our kid’s play dates would be horribly offended. Surely, this is the point of lists and groups, but there is more.

Email vs. Social Networking or Gmail vs. Facebook

Which brings us to the fundamental misunderstanding that makes Buzz a non-starter. Who we email, and who we tweet, update, and share with, are not the same.

The super-techie types and the super-marketing types may insist that the power of social networking websites like Facebook and services like Twitter comes from being able to interact with your whole network all of the time. However, the vast majority of those of us who make up Facebook’s 400 million users are neither.

We only link to certain friends and contacts. We shudder when our Great Aunt Matilda sends us a friend request. We don’t want our contact list to be our friends list.

In other words, while my Google Address Book bursts at the seems with people I met at a conference two years ago, and who from time to time, I do send emails too, I am not interested in those people seeing pictures of my kids, my new barbeque, or where my tickets are for Buffs home games. Frankly, I’m not interested in hearing about those things from them either.

If Google wants to play in this space, they have to acknowledge what everyone else has already figured out. The web is not all just one big thing. That’s why social networking is often called Web 2.0. It is different than the "regular" Internet of websites, searches, and emails, and we like it that why.

Incidentally, if it is any consolation to the search engine king, this same concept is why, for all of its attempts and numerous re-designs, Facebook search and Facebook email is doomed to failure for anything outside of the Facebook environment. While I might love to hear what my buddy Frank has to say about his new high-definition LCD TV, I don’t care what he thinks about the benefits of knee surgery, spas in Crested Butte, or where to take my children for their birthdays.

Facebook and Google, social networking, and the regular Internet are all different, and never the two shall meet.

AT&T Coverage Versus Verizon Wireless Coverage – What a Difference Wording Makes

AT&T and Verizon have been going back and forth in their advertising lately regarding AT&T cell phone coverage and Verizon’s claims about it. If you missed it, the whole thing started with some television commercials in which Verizon showed AT&T’s coverage map compared to Verizon’s coverage map. The commercials were apparently effective, because not only did AT&T fire up some counter-ads, it also sued.

At issue is the AT&T coverage map shown in Verizon’s ads. The commercials parody the Apple iPhone commercial’s line, "There’s an app for that" with the line, "There’s a map for that." The map in question shows AT&T wireless coverage for its 3G network, the one that is supposed to be handling the iPhone and it’s users because it is a faster data network. With 3G connections, accessing the Internet on an iPhone or any other mobile phone for that matter is much faster than on the old cell phone network technologies.

AT&T sued saying the ads were misleading and then started airing its own ads starring Luke Wilson in which Wilson says that AT&T has way more coverage than shown on that Verizon map. Then, he goes about flinging post cards around the map.

So, what happened? Who is lying, Verizon or AT&T?

The answer, as it often is in marketing, is that no one is technically lying. How can that be possible?

Well, as it turns out the map Verizon shows of AT&T 3G coverage is accurate. In fact, it is lifted from AT&T’s own maps of its 3G coverage area. So, what is AT&T complaining about?

AT&T said in its lawsuit that the ads implied that AT&T cell phone network has no coverage of any kind in the non-red areas on the map. It claims that casual T.V. viewers would be confused by the map and think that AT&T’s dismal 3G coverage was the same as its marginally better coverage with older slower technologies.

The Luke Wilson counter-commercials in which Wilson says, "Verizon has been making an issue about maps," uses a map of AT&T coverage that includes any kind of coverage whatsoever.

So, who is telling the truth?

Well, if you want to use a smartphone, iPhone, or any other mobile phone that accesses the Internet using the latest fast networking technology, then Verizon is telling the truth. You will only get that faster 3G coverage on the map with less red.

If you just want to make a phone call, then AT&T is telling the truth with the map that has a lot more red.

The question is, which is more deceptive? An ad portraying a network better suited to handling the kind of traffic used by "an app for that" showing how bad AT&T’s fast 3G network coverage is, or an ad depicting that ad as inaccurate by showing a map that displays where old network technology should allow any cell phone to at least make a call?

I’m going to give this one to Verizon as being more truthful. They are essentially saying that iPhones aren’t going to work very well in a lot of places because 3G coverage is not available in many locations. While AT&T is trying to show counter that they "cover" a much bigger area without mentioning what kind of coverage they are talking about.

As always, with marketing it comes down to parsing the exact wording in the advertisement.

Amazon Affiliates Shuts Down Twitter and Link Shorteners

amazon-associates-affiliate-program-graphic

Update: It seems that Amazon is going out of its way to make me look foolish :)   Just kidding. Actually, just got an email update, partially excerpted below, from the Amazon Associates folks about a new way that the affiliate program will integrate directly with Twitter. Basically, it makes the rest of this post moot, but if you want to read, go nuts :)

The Share on Twitter feature is easy to use. Simply log in to your Amazon Associates account and then visit any detail page on Amazon.com. By clicking on the Share on Twitter button in the Site Stripe, a new window will open and an Amazon-generated message is pre populated in the ‘What are you doing?’ text area of your Twitter account (you may be asked to log in to your Twitter account). That message will include a shortened URL that already includes your Associates ID. You’ll have the option to edit this message or simply hit the ‘Update’ button to post to your Twitter account. When Twitter users click on the link in your post and make a qualifying sale, you’ll earn referral fees. That’s it.

A bit of a rumble making its way around the Blog-o-Go-Round regarding Amazon’s denial of commission payments for sales made via links shortened and then posted to Twitter.

There are many different ways to make money using the Internet. One of the most common is by enrolling in what is known as an affiliate program. Basically, “affiliate program” is an euphemism for getting commissions for sales or traffic that you generate by linking to the website or products of the selling website.

Amazon Associates is the brand name of Amazon’s affiliate program which pays commissions to people who refer buyers to Amazon’s website via links. In the Utopian version of this referral program, people sign up to become Amazon Associates and then link to various Amazon products that they recommend or endorse based upon either personal experience or research. In the real world version of the program people try numerous ways to game the system, oftentimes providing links either indiscriminately, or deceptively.

Of course, such trickery is only valuable to those in it for the quick buck. The Internet Marketer (another euphemism) doesn’t really care if the person who follows the link feels like they were treated well, or honestly, as long as they buy something after they follow that link to Amazon.  Amazon feels differently, and for good reason. They are a multi-billion dollar business that depends, in no small part, on its overall reputation as a legitimate online retailer for sales.

Consider the number of people willing to pay a few dollars, to many dollars more for a given product in order to buy it from Amazon, instead of some other website that they have never heard of before. Couple this with free shipping for orders over $25 and the trust that people have about Amazon’s return policies and you have one of the only ways possible to defend against smaller cheaper competitors.

I, myself, routinely shop around online using a variety of websites, tools, and just plain old Google searches of the shopping type and to a lesser extent Microsoft shopping searches that offer cash back. In the end, however, unless the price difference, including shipping, is at least ten bucks or more, I’ll just buy it from Amazon. It is worth the extra money to avoid the potential hassles of not knowing whether or not that other online store is a good one or not.

Twitter, Link Shorteners, and Scams

Amazon has decided to not pay affiliates who link to their products via links that have been shortened. There are multiple reasons for this, but the main one is that by shortening a link, it conceals what the link is, and where it goes. It may be the case that most people don’t watch the status bar when they mouse over the a link to see where the link goes, but for those who do, a shortend link is a unknown link.

Another reason Amazon is not too keen on shortened links is that the destination of those links can be modified at will. The idea behind Amazon’s program is not to link to Amazon whenever their commission is the highest, or there is a hot product available, but rather to link to products and pages as part of a bona-fide recommendation.

Obviously, making arguments against these points is difficult. However, those opposed to the Amazon policy to not pay commissions for referrals via short links have finally found their rallying cry. As with all unsavory things, it is necessary to find a squeaky clean example to lead the protest, otherwise, people just tune out the cries of the “gray area” crowd as the whining of people who are getting what they deserve.

For the no short-links policy, the rally point is Twitter. Since Twitter messages, or tweets, must be a relatively short 140 characters or less, a full Amazon link including the associate ID or affiliate ID is pretty much out of the question. The only answer, for these clean cut, all-American, Twitter folks is to use a link shortener for their earnest, well qualified recommendations.

The reality is that the vast majority of Twitter users spewing out affiliate links via short links are exactly the kind of hucksters that Amazon doesn’t want using its program in the first place. Twitter’s number one danger for becoming a second-rate, spam only, destination, on the Internet is the number of charlatans using the service to find suckers customers. The traffic they send is less likely to convert, and worse, more likely to complain.

Of course, there are those who make legitimate recommendations via Twitter. They would have to use link shorteners as well. However, even they, have a bit of a weak spot. The idea that Amazon considers something like, “I love these new Chewy Chips Ahoy Cookies – http://bit.ly/NOTAREALLINK” to be one of the ways they want to get traffic to its site isn’t very convincing. Sure, publicity is good, and so are well-meaning referrals, but Amazon knows that whatever good these limited cases might bring, it pales in comparison to the negatives the vast majority of link shortened links provide.

In the end, the Amazon policy is better for the “straight” Amazon Associates membership, better for Amazon, and better for Amazon’s customers. It stings the sneaky, weasel, membership right where it hurts by taking away one of their most prevalent tricks. It may catch a handful of good guys along the way, but I think given real unbiased consideration, without the emotional attachment of a missed commission, even they would approve.