I have no inside knowledge (other than being in publishing generally) but they're in a hot space with relatively good advertising opportunities right now, they also run events which should, in theory, be quite profitable.
My totally unfounded theory/opinion is they were overfunded and the investors wanted to get out after not seeing the growth levels they wanted (which in publishing is not a big surprise, you almost never see SaaS or consumer app levels of growth there).
GigaOM (or, Gigaom, given the rebranding following Om's departure) was my first internship in SF. I always really respected Om. While often to the detriment of Gigaom's bottom line and readership numbers, Om was adamant about avoiding controversy and clickbait. I was always proud to say I worked at Gigaom.
Om had a great video show on, IIRC, Revision3 years ago (back before YouTube was used so regularly for these kinds of things). I used to watch it religiously. It's such a shame tech industry news (as opposed to tech news) got taken over by Gawker, Pando and other clickbait sites.
> Gigaom recently became unable to pay its creditors in full at this time. As a result, the company is working with its creditors that have rights to all of the company’s assets as their collateral.
Sounds like a fairly hostile takeover that no one was expecting. I wouldn't be surprised to see something very similar be spun out of it, perhaps not bearing the name of the departed founder.
I think the phrasing "in full" is important here. It implies that a debt was "called in" and thus something more political is at play. I don't think this means they couldn't pay their bills. I wonder if venture debt is involved.
My personal take is that Gigaom will be sorely missed. They've had some top notch writers and they've put out a lot of great stuff lately. But.. they've also had several funding rounds over the past 8 years and when you take $20m+ over 8 years and you can't hit a crazy level of growth, the VC grim reaper rears its ugly head.
While some of the podcasts seemed to be a bit fluffy, I always appreciated the Structure Show as a survey of where infrastructure software was. Any suggestions of similarly aimed content to subscribe to?
There are so many tech publications, and I never knew why I should read Gigaom instead of others. Perhaps that's one reason they didn't attract enough revenue. Can anyone answer that question?
Even better: Can anyone advise what publications they would read if they were interested in innovations in technologies and in their applications, rather than in products? That is, I'm interested in innovations or developments like IoT or blockchain or HTTP/2, and innovative ways to utilize them. Generally I'm not interested in something like the latest MacBook Air; it's significant in the marketplace, but for my purposes it only marginally improves and repackages existing tech.
I have visited his writings in the above link more than the actual Gigaom site. One thing i will say, is that there are some really talented journalists at Gigaom.
(If you happen to know an address for an RSS feed of Technovore, I'd be very appreciative. Fast Company seems to offer only their entire site's headlines (http://feeds.feedburner.com/fastcompany/headlines), which has too poor signal-to-noise to add to my feeds.)
I read a bunch of different tech sites, but it my opinion, the most relevant stuff is on HN. It basically aggregates all the best stuff from all the tech publications anyway, so you are probably just as well off in the end. Of course, if you want to read more academic articles per se, stick to the big science publications like Nature, etc.
Ars Technica is basically an aggregator that dumbs things down almost to Associated Press level. Ars will give you a clue about what's newsworthy, but if you want technical details you have to track down their sources (which were probably on HN and Reddit the previous week).
Yep, I saw a sharp decline in quality and increase in clickbait right around when GamerGate picked up steam. Maybe it was happening before but it's very noticeable now. Too bad.
I have stopped frequenting Ars over the last year or so, which is a shame. Their articles back in the day about CPU architectures (P4, Core, AMD64 etc.) were basically the reason I went into Electrical Engineering.
For me, Ars is still better than every other site listed. Their quality might have slid, but they are still the best[1]. I grew tired of other sites' clickbait and/or blatant partisanship/slant.
I've always found if it was really important, it would show up in my twitter feed or HN - So rather than going to the various sites, I just use those two as my meta-index.
It was my site of choice because they weren't so shameless about pushing tons of clickbait on the readers. Alas, it must have contributed to its demise.
In the big data space, you had to read Gigaom. They cared a lot about projects like Hadoop, and it showed. Derrick Harris has been doing great work for years. RIP for a solid tech publication.
Agreed. GigaOM was also a terrific source for news about Cloud Computing. Derrick and Barb Darrow had a great podcast as well that covered both topics, The Structure Show. An extremely entertaining and well produced podcast that had some terrific interviews.
Such a shame. Was always a big fan of Om from back when he'd appear on the Cranky Geeks show and loved what he built at GigaOM.
I actually just rely on an RSS reader to present a whole bunch of ad-free headlines to me, and then I decide what looks interesting. The hottest topics are often covered by multiple, similar outlets, and then there are also niche publishers (like gwern, for example).
Almost unbelievably, on mobile my favorite feed reader is Pulse, which LinkedIn bought a year or so back. I've used Feedly, too, and Google's Newsstand, but Pulse seems easier to scan through.
For tech-specific news, HN is the best source to meta-news that's actually technical, as well as human curated weirdness. /r/programming, /r/technology, /r/android, etc are all good, too. Whenever there's a big trade show or launch event, I usually check Pando, TheVerge, UberGizmo and a few others (Re/Code, Mashable, VentureBeat, etc). I have an IFTTT recipe that pushes any new Android app disassembly article from Phandroid and Android Police (they do a FANTASTIC job of analyzing Google app updates for unspecified changes, and also always rehost the APKs). I look for in-depth product reviews from Anandtech. I laugh at XKCD's always timely cartoons.
Note that for the ones I follow via a reader, I almost never go to their site directly, and never see any ads. I do use an adblocker (uBlock), but I am considering uninstalling it because of memory consumption. I'm on a Chromebook most of the time and between Gmail & adblockers, 4GB of RAM just isn't sufficient.
Recode automatically has rep here because it's run by the main principals of the old WSJ site AllThingsD. Kara Swisher and Walt Mossberg earned their rep—ReCode is just keeping it alive.
Thanks to Mathew Ingram for his valiant articles and twitter commentary on journalism ethics. Maybe he will consider following the Ben Thompson / stratechery business model.
I'm pretty surprised by this, particularly in part because their events business seemed robust. My company sent me to an event of theirs in NYC two years ago, and it had a very high caliber of presenters/panelists (David Karp, Andrew Sullivan, Tim Ferriss, a few others). The tickets also weren't cheap.
Sure, the company didn't go down the clickbait road, but it also had come up with revenue models that made up for that. Beyond events, they also had a research group—something that, to a degree, arguably made their real competition Gartner and Forrester.
I thought they were on much more solid footing, considering the funding last year and the very strong talent in their ranks. For instance, Laura Hazard Owen is one of the best reporters covering the ebook industry.
This could be a sign of things to come for other online pubs once the funding runs out. Too much competition, too little in the way of sustainable revenue sources, and not enough AOL acquisition cash to go around.
This is sad, and not entirely unexpected. Look for a large number of websites to go under just like Gigaom.
Oddly enough, the reason these folks are failing is that Google's CPC (the money they get for an advertising "click") has gone down Year over Year for the last 13 quarters. What that means is that if your web site depended on advertising from Google (and most do), and your traffic remained constant, you have seen a 33% drop in gross revenue over that same period. Google doesn't call out their click fraud numbers, but they do improve their ability to detect it over time, which means your "quality" click through rate has been going down as well, for a double whammy. So unless you can improve volume, you die. In their Q4 report[1] they make this note:
Network paid clicks, which include clicks related to ads served on non-Google properties participating in our AdSense for Search, AdSense for Content, and AdMob businesses, decreased approximately 11% over the fourth quarter of 2013 and decreased approximately 7% over the third quarter of 2014.
A third less advertising revenue on a 11% fewer clicks over all? Serious pain.
As of the fourth quarter, Google also mentions it is paying nearly a billion dollars a quarter ($968M) to get search traffic. If you're a GigaOm and your traffic is already generating less revenue and fewer clicks are getting through, you can't really add insult to injury by paying people to send you traffic.
I've seen YouTubers complaining about this too. One I follow (who has over 2m subscribers) says his views are up strongly in the past year (as in over 50% more) but his income has fallen by a third.
On a popular space webcast, TMRO, the host mentioned their YouTube revenue was a "rounding error" compared to their revenue through Patreon (https://www.patreon.com/tmro). They get $1000+ per episode.
When did YouTube start using these really annoying video ads? Because it seem at that point that my non-technical aquentiences started to install adblockers.
My adsense money went from $1000/yr to $100/yr and now I'll be lucky if I break $25. Nothing changed with my users. My only guess is that everyone is using adblock.
I use it, but it wasn't until my money went away that I thought much about it. I definitely have less incentive to keep it going. I'd need to go through the hassle of getting more dedicated advertisers or sponsors now. So in that respect it's bad for websites in general.
I really doubt any browser will start installing it by default, so I think adblock will be limited to:
a) Really technical people (HNers)
b) Friends of HNers that are bothered enough by the real web experience while on their friend's systems that they go ahead and install adblockers.
I don't see adblockers covering more than 10% of web users, and they're likely the least valuable 10% of web users (they may earn a lot, but they don't have burning holes in their pockets either).
Depends on the niche. I run a tech site with 1.2 million daily page views, and yet Google reports 400,000 ad impressions a day. The other 66% are being blocked. This isn't hard to believe, since all my tech friends run ad blockers.
Jumping in here as we produced that data. Global average is about 5%, but in US & UK it's about 15%. In much of Europe it's about 2X that. If you have a technical audience, 20% - 30% adblocking is now normal. If you are gamer-focused, 40% - 50% is normal.
The growth isn't driven by technical people any more; it's normal people who've grown up using web browsers and who don't think twice about installing an extension on Chrome. You're correct through that it is spreading through word of mouth. You can get more on the pagefair blog.
My brother - who is not a programmer, but skilled enough to run Linux - has just started using adblock a couple days ago. We are in that other part of Europe.
My point is that adblock usage doesn't seem to be nearly as prevalent as we assume - at work (where everybody has admin rights on their work machines) maybe 10% of the non technical users have it. The point that makes people install it seems to be youtube ads.
So here's a pesky theory that pops into my mind every time I hear a story like this. I really hope everyone will say it's crazy, though, because the consequences are pretty dire.
Advertising is good at selling some products, but advertisers are spectacular at selling advertising. So we've had almost a century-long bubble in bullshit.
The best way you outsell other advertisers, masters of bullshit themselves, all spinning how effective their ad is, is by selling metrics alongside your advertising. Metrics are the anti-bullshit. Well, almost...
You want something that looks like "actual sales caused." You want to tell a guy, "pay me $10 per ad, and I will generate 10 sales, each giving you $2 profit you wouldn't have otherwise made. We'll split the winnings."
You want to claim metrics for sales caused, but you don't really want those exact numbers, you kind of want something that looks hard that you can spin. Something loosely correlated with "actual sales caused" where your art of bullshitting can get slightly better returns than the exact numbers would get. Play to your strengths, right?
So magazines come along with subscription numbers, and that's great sauce. Then television comes along with the Nielsen family and, ok, actually Nielsen starts way back with radio in the 1920s, but same idea. Radio/television advertising reaches the most people and every company starts to pay a premium.
Advertisers have the whole industry sliced, diced, catalogued and formulated. Superbowl is the premium end, free weeklies are the bottom of the barrel. Everybody has a place, but everyone's using the same game to guess at eyeballs, to guess at actual sales caused.
Suddenly, though, there's this new game on the internet. Not a lot of eyeballs at first, so it starts in free weekly category. Suddenly though, Google (and maybe some other companies) can tell you how many ads are actually getting action rather than just eyeballs.
It's a metric like we've never seen before, it's the killer metric. Sure, you could get this from surveys, or test markets, but this is like measuring everyone who sees the ad. It's pretty cool.
But remember, metrics this accurate are dangerous, it shows when advertising doesn't work too.
And a lot of advertising is spin, a lot of it isn't all that great, because advertisers are better at selling ads than they are at selling your product.
I hope someone tells me this is all nonsense, though, because if it's true, then Internet advertising is both absorbing the advertising industry then destroying it.
That'd be sad. I mean, sure, it's showing us which of our emperors are already naked. But it might mean the constant death of random content sites like this.
There's a lot of interesing stuff in this comment. But it seems to conflate lead-gen with advertising. There are lots of reasons to advertise that don't relate to the sales funnel.
The second issue is alot of internet advertising is bullshit, including the metrics. Now, some things are good--actual-purchase links are decent data, but again that's really lead-gen not advertising.
If your lead already wants to buy your product, its too late for advertsing and you're really more into a different game. Nobody looks at an ad in the superbowl and the runs out and buy something 12 minutes later. The fact your narrative doesn't apply to that case is more a sign that something is missing in it, not that superbowl ads are mis-priced per se.
The metrics are often broken. Think about how you measure it...
Ideally, you want to pay the ad platform for sending you a user who will buy your product. So you say something like:
"I'll pay you X for every user you send me who buys something".
Great, right?
Except now the ad can simply optimize for users who were GOING to buy your product anyway. So now you've spent money getting users who would have been there anyway.
What you really want is to pay for users "Who buy my product, but would NOT have bought it without the presence of the ad". And that's a much harder thing to measure.
"Ideally, you want to pay the ad platform for sending you a user who will buy your product."
Brand advertising is built around the concept of "When a person is making a buying decision, I want them to buy my product."
We know it works, because when you stop doing brand advertising for things like Toilet Paper, Detergent, Toothpaste, Deoderant, etc... sales go down. And when you start the advertising again, sales go up.
Don't people just sample the market to find out a brand that is to their tastes (performs as desired) and then keep buying it while the price is still of value?
There are a lot of theories, but, the one thing that has been consistent for at least the last 60 years, is that if you have a consumer Brand of something, say "Tide Detergent" - and you stop all your brand advertising in a certain region, sales go down in that region, and when you start advertising again, sales go back up.
Price, Value, Placement, and, obviously, competition are all conflating factors as well - but the underlying response to advertising has been pretty consistent.
I've always wondered what the marketing campaigns look like for the 100 different brandings of the same product at the grocery store. Do Toothpaste A and Toothpaste Z340 target completely different demographics, or are they going for the same eyeballs with their ads?
Advertising is good at selling some products, but advertisers are spectacular at selling advertising. So we've had almost a century-long bubble in bullshit.
This should be inscribed in 50-foot tall letters of fire hanging in the air above Silicon Valley.
I agree. I think the demise of newspapers is largely from those buying advertising finally having hard and credible evidence that they were overpaying for a few centuries.
Advertising wasn't (and isn't) valueless, but the benefits were overextolled.
> I agree. I think the demise of newspapers is largely from those buying advertising finally having hard and credible evidence that they were overpaying for a few centuries.
There is something else at work here though. It could be that people were overpaying for advertising, but it doesn't cost a lot more for a print ad than it would cost to have the ad printed and mailed to the same number of people who subscribe to the newspaper. The newspaper makes money because they put your ad in the newspaper they were already going to print and deliver and then they get to stick your ad money in their pocket. It's a nice deal for them.
But the internet equivalent of direct mail is spam. Or mailing lists to be more charitable. In ether case there is no printing and delivery cost. And the advertiser will now also have their own website which anyone can go to and view their products at trivial expense to the advertiser.
So sellers of advertising are no longer providing printing and delivery services or access to finite broadcast airtime. The equivalents of those things are no longer scarce or expensive.
The only thing they're selling is the ability to put your ad in front of customers who otherwise might not see it. Which might still be valuable if they had some kind of exclusivity in providing that, but they don't. Eyeballs aren't scarce either. Everybody visits many websites every day. The advertiser can get their ad in front of the customer by putting it on any subset of those websites, which then have to compete with each other for the advertiser's money.
So the price of advertising goes down. Somewhat fortunately for the likes of Google, then the Jevons paradox kicks in and people realize that if advertising becomes cheaper then it's profitable to buy more of it. So companies aren't spending less money on advertising.
But there are still many times more people selling it. And if companies spend twice as much on advertising but there are twenty times as many websites offering ad space, at the end of the day they each end up with ~10% of what they used to.
Interesting comment! Not entirely sure how relevant or accurate this is, but I thought I would point out that in Feb 2014, Om Malik from Gigaom wrote:
> In 2008, our company decided that we would not pray at the altar of pageviews and advertising metrics that do nothing but devalue our readers’ time and attention. Instead, we opted to take the road less traveled — subscription revenues.
I'm in the category where I don't need ads, I need timely and well categorized (machine sortable; accurate) results for product requests that I have when I discern a need.
I don't fell bad at all about running an adblocker because I would never have clicked on the ad to begin with (it also saves bandwidth and eyebleach); unobtrusive well placed and related text ads /might/ remind me of a need I had been meaning to fill.
>Suddenly, though, there's this new game on the internet. Not a lot of eyeballs at first, so it starts in free weekly category. Suddenly though, Google (and maybe some other companies) can tell you how many ads are actually getting action rather than just eyeballs.
>It's a metric like we've never seen before, it's the killer metric. Sure, you could get this from surveys, or test markets, but this is like measuring everyone who sees the ad. It's pretty cool.
>But remember, metrics this accurate are dangerous, it shows when advertising doesn't work too.
I suspect that metric is nowhere as accurate as most people believe it to be. But I agree with the spirit of this message: a lot of the BS is getting exposed.
There is some confusion as to what magic actually is. I think this can be cleared up if you just look at the very earliest descriptions of magic. Magic in its earliest form is often referred to as “the art”. I believe this is completely literal. I believe that magic is art and that art, whether it be writing, music, sculpture, or any other form is literally magic. Art is, like magic, the science of manipulating symbols, words, or images, to achieve changes in consciousness. The very language about magic seems to be talking as much about writing or art as it is about supernatural events. A grimmoir for example, the book of spells is simply a fancy way of saying grammar. Indeed, to cast a spell, is simply to spell, to manipulate words, to change people's consciousness. And I believe that this is why an artist or writer is the closest thing in the contemporary world that you are likely to see to a Shaman.
I believe that all culture must have arisen from cult. Originally, all of the faucets of our culture, whether they be in the arts or sciences were the province of the Shaman. The fact that in present times, this magical power has degenerated to the level of cheap entertainment and manipulation, is, I think a tragedy. At the moment the people who are using Shamanism and magic to shape our culture are advertisers. Rather than try to wake people up, their Shamanism is used as an opiate to tranquilize people, to make people more manipulable. Their magic box of television, and by their magic words, their jingles can cause everyone in the country to be thinking the same words and have the same banal thoughts all at exactly the same moment.
In all of magic there is an incredibly large linguistic component. The Bardic tradition of magic would place a bard as being much higher and more fearsome than a magician. A magician might curse you. That might make your hands lay funny or you might have a child born with a club foot. If a Bard were to place not a curse upon you, but a satire, then that could destroy you. If it was a clever satire, it might not just destroy you in the eyes of your associates; it would destroy you in the eyes of your family. It would destroy you in your own eyes. And if it was a finely worded and clever satire that might survive and be remembered for decades, even centuries. Then years after you were dead people still might be reading it and laughing at you and your wretchedness and your absurdity. Writers and people who had command of words were respected and feared as people who manipulated magic. In latter times I think that artists and writers have allowed themselves to be sold down the river. They have accepted the prevailing belief that art and writing are merely forms of entertainment. They’re not seen as transformative forces that can change a human being; that can change a society. They are seen as simple entertainment; things with which we can fill 20 minutes, half an hour, while we’re waiting to die. It’s not the job of the artist to give the audience what the audience wants. If the audience knew what they needed, then they wouldn’t be the audience. They would be the artists. It is the job of artists to give the audience what they need.
What this tells me is that if you're running a website that uses Google advertising as your primary source of revenue, you should probably sell up now and get out while the getting is good. Ad-based sites simply cannot survive anymore.
Google AdSense stopped being a viable source of ad income for even large-traffic publishers more than 6 years ago.
To be clear: as-based sites can absolutely survive, but you need a sales team and good as-ops. The best CPMs are going to come from sales people getting deals done, not algorithms and text ads.
That's obviously false. Whether you can survive on ads is strictly based on your cost of operations.
The Internet is overflowing with ad-based sites, and will continue to be. Some will die, the radical majority will not. Five years from now there will be more ad supported sites than there are today.
The alternative to Google is to run your own advertising. This is especially true for sites with the scale of Gigaom.
>Google is simply too good at matching viewers to advertising that is valuable to them (and therefore the publisher).
This is so wrong, I don't even know where to start. Google is very good at managing ad inventory and putting ads from said inventory in front of people. What they aren't good at (or even care about being good at) is getting the right inventory mix for the right site. That requires focused sales teams.
I'm not going to go down the native advertising rabbit hole because I don't have time ro have the conversation it needs to have, but I will say that whatever you think it is, it's both better and worse than that. And everyone who is successful in publishing does it to some extent, maybe just by a different name. And it's not new. It's been happening since the beginning of mass media. I can understand not liking advertorials or content that is unclear, but there are not plenty of people making native advertising that doesn't interfere with editorial missions.
>Running your own advertising is hard to be successful with, unless you can convince your advertiser to really overpay.
Again, this is not true. For a small publisher, running your ads is probably not worth the tech or sales investment. If you're the scale of a GigaOm, you need to take control of your ad game yourself. You can supplement sith ad networks, but the real money comes from doing it yourself. And with good ad ops, you can also provide a way better experience for the ad buyer.
Again, we're not talking about small one person publishers. We're talking t about sites that do millions of uniques and have full staff. If you're doing that and not maintaininf tour own sales staff, you're leaving money on the table, incompetent, or you have a product no one wants. Or all three.
I wonder if the transition of readers to mobile can make life hard for content companies monetised through ads? In a typical content site on a large screen, you have loads of opportunities to incorporate advertising. On a mobile screen, you have far less space.
On the plus side, it is far more difficult to install an ad-blocker on a mobile device.
Most adblockers are not on the computers of the HN-type, but rather installed by HN-type people on their friends computers. (ie: I've probably installed them on 5-10 systems). However, I probably wouldn't bother installing it on friend's phones/tablets, since I use mine, not their's.
On the negative side, mobile ads should pay less, since I'm less likely to whip out my credit card and buy something big/profitable on it. At least that is me anyway.
Until there's a clear path to buy something, CPCs on mobile screens are going to be worth fractions of their Web counterparts.
Current e-commerce experience on the mobile is "fiddle with your phone while trying to type up your account information, shipping address and billing data", so conversion rates are understandable abysmal, leaving mobile ad space to people promoting app installs.
Advertisement providers that work in mobile really need to get their shit together. Ads that redirect the app store are utterly unacceptable and ludicrously common. Audio ads seem less common, but are just as unacceptable. I browsed without an ad blocker on mobile for a year or two before I got so fed up with the malware bullshit that I switched to Firefox for Android with ABP installed. Advertisers have no one but themselves to blame for the prevalence of ad blocking software.
> Oddly enough, the reason these folks are failing is that Google's CPC (the money they get for an advertising "click") has gone down Year over Year for the last 13 quarters. What that means is that if your web site depended on advertising from Google (and most do), and your traffic remained constant, you have seen a 33% drop in gross revenue over that same period.
All it means is a 33% drop per click, not per thousand visitors, or gross revenue over a same period.
As Google gets better at matching ads to users, CPC would be expected to go down, since there would be more clicks, and each click would therefore be less valuable, but there would be more clicks overall.
As a micro-publisher, the first question that friends ask to satisfy their curiosity is "How much do you get paid per click", and I have to answer that total revenue is all that really matters, not revenue per click.
> All it means is a 33% drop per click, not per
> thousand visitors, or gross revenue over a same period.
Actually it does. Allow me to explain.
In a purely statistical way, for any given web page getting 'n' views, and to keep our units consistent we will define pageviews/1000 as its traffic or T. Some fraction of those views will include an ad click. This is the 'Click through rate', and it can be calculated per thousand page view to get a 'CPM' or clicks per thousand. If you are an AdSense advertiser, Google will tell you what the CTR is for each page on your website that has AdSense ads on it. Each click gets some amount of money, this is the 'cost per click' or CPC. The product of those three, is Revenue per thousand or RPM, so
RPM = T * CTR * CPC
If you multiply CPC by .66 (down by 33%) that multiplication goes right through to RPM. (or revenue). Regardless of how much traffic you are getting.
If Google got better at matching ads to users, then your click through rate (CTR) would go up because the ads would be more appropriate to what the viewer was looking for or interested in. It would not affect the cost per click which is what the advertiser is paying Google, you would just get more clicks per thousand.
Web site publishers really only have two things to try to optimize, click through rate and total traffic.
If you have heard the term 'click bait' it specifically refers to ways that a web site tries to increase its click through rate by making it more likely you will click on a link (or advertisement). This is the number a web site has under its control. It can also buy AdWords to put its content at the top of search results, or pay a company like OutBrain to put a link to its content at the bottom of an article, both of these are called buying traffic because you are paying someone (Google or the site running Outbrain 'ads') if someone clicks on that link and comes to your web site. If the amount of traffic increase * CTR * CPM (your marginal revenue gain) is greater than the amount you spent to get the traffic, then it is a good deal for you. However, for more and more people that number is negative, they just lose money faster because their ad revenue is going down and the amount they keep is further reduced by the cost of the traffic they bought.
And to your final question, yes fraud detection does improve click quality but that hasn't been reflected in advertisers willing to pay more to advertise as Google's sinking CPC number shows.
Absolutely. I run a rather large (non-tech) site that doubled in traffic from Feb 2015 vs. Feb 2014 and AdSense revenues were actually down about 6% year over year.
Uniques and pageviews were way up, click-through rate was near constant, but CPC got clobbered. It's incredibly frustrating and I can only imagine we'll see a great thinning of the herd across verticals very soon.
If you're doing this for a living the last thing you should be doing is relying on Google ads. The publications that make money at this have sales staffs (and much higher CPMs, and no CLC campaigns)
I was the editor in chief at Dr. Dobb's, which many of you know closed down in December. As I explained in my farewell editorial [1], our ad sales were squeezed by a comparatively recent phenomenon in media, which is a very steep drop in vendors' willingness to buy Web ads--a lifeline for most web sites.
The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad.
For certain consumer sites, that's a survivable problem. For example, Budweiser's ads aren't intended to make a sale, but rather to remind people of the brand. However, for many tech companies (those that aren't tier 1), they don't have the funds to do brand-oriented ads. Their ads need to result in clicks and purchases. And that's just not happening on pure websites. (FB and Twitter are a wholly different category.)
Personally, I expect that more web sites in the tech sector that have depended in the past on advertising will either fail or drastically cut back on their offerings.
Great comment. As part of the marketing team at a well funded but very money-conscious startup, I can confirm this awareness that most web ads have no visible effect on the bottom line, or the cost of customer acquisition is so high as to be prohibitive. On the web, people are overwhelmed with marketing messages. It's very hard to find the right demographic, and then to convince them to act. This has always been true, but it has become much more measurable since the Internet came along. Unless you are a large corporation with the belief that "branding" can be bought, and the budget to back it up, there's no reason to buy online ads in most venues.
As a (very) small-time publisher, but with a fairly reasonable sample over the years, CPM ads pay about 1/5th what CPC ads do. I think that shows how much "brand awareness" versus "I'm trying to make a sale" advertising is worth.
Edit: CPM pays 1/3rd the rate, but CPC ads make up 90% of revenue, which makes sense if they generally pay more. I run a rather diverse set of sites, but I stay away from tech.
I concur. Back in 2006-2008, AdWords was incredibly effective for my company, then the leads gradually dried up, and after a while we realized it provided nothing useful anymore, unless you buy incredibly expensive keywords (up to several dollars per click).
It may still be effective for pure consumer-oriented services, but is IMO useless nowadays for B2B unless you're a large, deep-pocketed company.
We've had that trouble as well - anything related to offsite backup or cloud storage has outrageous pricing - perhaps $8 or $12 per click (!).
The frustrating thing is that if you do find keywords that have low prices, google will refuse to run them for you because too few people search for it. Citing "low quality", google will force you to artificially inflate your CPC just for the privilege of running a niche keyword.
There is this idea that every day there are X people on the web searching for exactly what you offer, and if you show them an ad during the search: success. I believe this to be true, but google makes it all but impossible to pursue low traffic, niche searches. They literally refuse to run them.
Back before the internet was huge I used to subscribe to 3-5 computer magazines. PC Magazine, Wired, ... I don't even remember the other ones, probably mostly video game mags.
I used to look forward to the ads just as much as the articles because it was a way to find out about new products. Now though I need no such ads. I see the announcement on the various tech sites or from friends that read the tech sites. Almost zero need or interest in ads anymore and pretty much do my best to ignore them.
With publishers dropping off like this; when will the decreased business show up in Google's revenue? Google being the biggest advertisement broker thru AdSense and similar programmes.
More people are spending more time on the internet on more devices.
So far, this has protected Google from decline. Eventually Google will become a blue-chip stock because they can consistently match advertisements to users better than anyone else can.
If the publisher's revenue drops due to there being more publishers then Google and similar would be safe but andrewbinstock writes that it is vendors that have lower willingness to pay for online advertisement; they are simply spending less on online advertisement. That should effect Google all things being equal.
> With publishers dropping off like this; when will the decreased business show up in Google's revenue?
Never. Publishers aren't dropping off in sum, just the bad ones are cycling out and are being replaced with more nimble, relevant, cheaper, etc. content providers (ie. Grandparents thesis is not correct and is anecdotal)
There are is more and better inventory than ever and more audience than ever and both are growing at staggering rates.
Nothing is more amusing than a former employee of TechCrunch subtly swiping at the relevance of Dr. Dobb's Journal. Without a doubt, that's the funniest thing I've ever read in this line of work and says everything one would ever need to say about certain elements of the Silicon Valley culture.
Your analysis is just plain wrong, by the way. Dr. Dobb's was punished for delivering content. Turns out, advertising doesn't work as advertisers hope on people who actually enjoy content. When you deliver actual content at some point in your career, you will discover this to be true as well.
I'm actually a huge fan of Dr Dobbs, been reading it since I was 10 and would go to a lot of trouble to track down issues. My disagreement isn't with the magazine, it is with the thesis that online media advertising is dying.
There isn't a single cite in this entire thread to back that claim up outside of the anecdotal examples. The numbers for online ad sales and media revenue are all growing. The fact that the numbers haven't propagated through to Google's results is further proof of that.
Edit: some stats. The IAB report for last quarter shows 6% quarterly growth:
So where is this reported decline? It doesn't show up in numbers anywhere. There are profitable and well-run media businesses with both low and premium content in all sectors. I understand the tendency to want to blame this on some meta trend, but it just isn't there and can't be backed up outside of stories and feelings.
> So where is this reported decline? It doesn't show up in numbers anywhere.
"Network paid clicks, which include clicks related to ads served on non-Google properties participating in our AdSense for Search, AdSense for Content, and AdMob businesses, decreased approximately 11% over the fourth quarter of 2013 and decreased approximately 7% over the third quarter of 2014"[1]
"Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 3% over the fourth quarter of 2013 and decreased approximately 3% over the third quarter of 2014."[1]
"Google's Ad-Price Declines Continue for 12th Straight Quarter"[2]
> There isn't a single cite in this entire thread to back that claim up outside of the anecdotal examples.
ChuckMcM cited Google's earnings report in a top-level comment[3] nine hours before you claimed there isn't a single cite.
You're citing adsense which is CPC while most media is CPM and display advertising. They are two entirely different sectors.
AdSense struggles to distinguish between DrDobbs and a 12 year old writing about learning programming on Blogger. It performs when you have purchasing intent based sectors like gadgets, photogaphy, etc. (and a lot of blogs have built around that)
There is also a confusion here where CPM is used to refer to total CPC revenue divided by total pageviews. CPM is a specific display model where advertisers purchase Units of traffic volume and it scales out.
In any case neither DrDobbs nor GigaOM ran CPC ads in any significant volume (likely would only fill unsold display as backfill).
It is telling that somebody from DrDobbs - a display ad business would cite AdSense CPC performance or ad market performance as a reasoning for their failure. To me it just speaks to not understanding what went wrong.
Nobody should expect to take a premium magazine like DrDobbs, split it into online articles and then slap AdSense onto it and then sit back and count the money. That is totally unrealistic. It also doesn't work with just CPM markets either.
Premium brands require humans to sell them and not algorithms. If you don't have the scale to hire a sales team then you need to join a network.
You are exactly right. There were issues at UBM that had nothing to do with the industry at large. And GigaOm just had too much debt to overcome (IMHO). Many, many other tech pubs are thriving online, in site growth, revenue and profit.
> The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad
There have been a few times I've seen an ad on a website that looked like it was for something I wanted, and wanted to click it.
The problem is that I pretty much ignore the ads while I'm reading the page content, and so I only noticed these ads when I'd finished the content and clicked a link to leave the page, and my eyes are wandering while I wait for the new page to start loading. I click back to try to get back to the ad, and something else has taken over its spot. I might refresh a few times to try to get the desired ad back, but that has never worked for me.
I've been saying exactly this for quite a while. It is so incredibly stupid to replace the ads when the back button is hit. The probability that I hit the back button to click one of the ads is quite high, and the probability that I'll want to click one of the new ads that replace the one I was trying to get to is virtually zero.
> There have been a few times I've seen an ad on a website that looked like it was for something I wanted, and wanted to click it.
Absolutely. IMO, Banner Blindness alone is the biggest reason why web publishers are facing difficulty in monetising web inventory.
Many a times, people don't notice ads even if they were relevant to them, just because of banner blindness. In fact, 3 out of 10 display ads are never seen [1]
There is a trend towards awareness advertising - I think this is because the Super Bowl is barely more measurable than a bunch of display ads. The amount of $ spent on web and mobile advertising is tiny compared to the time spent there. If branded ads can make it on TV, perhaps that's the future rather than click through.
But awareness advertising doesn't pay as well (yet?). The real money is getting people at the edge of making a purchase to make that purchase, whatever it may be. And the ability for the web (or any advertising, for that matter), is increasingly being called into question (or people are getting better at questioning such purchases).
This is true. If I got a "$100 better than your best competitive offer" ad when I was car shopping, I would have clicked through. There was enough data on my phone to suggest this was the case.
> which is a very steep drop in vendors' willingness to buy Web ads
Any relative or absolute numbers you'd like to share?
> The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad.
My favourite experience with this was when I was selling a computer case and researched its specs on newegg.com. Then for a while all I saw were retargeted ads from newegg trying to sell me that case. Nonono, I didn't have one too few computer cases, I had one too many. I was the complete opposite of their target audience, heh.
You're example is obvious because Newegg can't tell the difference between market research because you're about to buy versus research because you're about to sell.
But it's always amused me (in a not very amusing way) that immediately after I purchase something I'm inundated with advertisements from the same vendor trying to sell it to me again. Big data is supposed to be about finding statistical relationships between events, right? In what world would the probability of someone buying something be highest when they're holding a brand new one in their hands?
What it really makes me think is the web advertising folks are pulling a con on their clients. They're not actually doing the critical analysis they promise but simply sorting by linear distance in n-dimensional space and hoping no one notices how useless the measurement is.
Isn't this a market opportunity, though? Make a website that provides product information for people who want to sell an item. Give tips on how to advertise and mail the item. Sell packaging supplies. Why isn't Ebay already doing this?
I have the same experience with Amazon whenever I buy a big-ticket item. When I interviewed with them, I asked them if they were working on that. "Yes, but it's hard."
A few years later my brother interviewed with them and they asked him how to solve that problem. I wonder if they were stumped, and if they were just looking for new ideas.
> My favourite experience with this was when I was selling a computer case and researched its specs on newegg.com. Then for a while all I saw were retargeted ads from newegg trying to sell me that case. Nonono, I didn't have one too few computer cases, I had one too many. I was the complete opposite of their target audience, heh.
Yeah, I've had similar experiences. Back when I used to play Eve Online, I'd see banner ads everywhere for the game. Big screaming banner ads imploring me to subscribe now.
At the time I already had two accounts. By definition I was the kind of person who could not be advertised to, but the ad network was still putting effort into targeting me with those ads.
I still get them and none of my 3 (4?) accounts are subbed anymore.
Oddly I almost never see WoW ads (excluding telly), but I do get the occasional email with free time/trials. Ofc they're all scams now, but once upon a time it really was a free upgrade...
What really annoys me is the online banking websites I use (or credit card ones) that implore me to go "paperless" and "try their app", whilst logged into their system as me. Funnily enough, I do use their app (so can't they set a flag to stop showing me the advert) and I am "paperless" as I'm logging on to grab the PDF statement. Again, why can't they set a flag: if (alreadyPaperless) { showAdverts = false; }
Its a customer retention scheme. If you're a customer of bank A and you're being flooded with ads from bank B, C, and D about greenwashing and being where the cool kids hang out, the simplest way for bank A to compete with B C and D is spam their own customers with greenwashing and aspirational stuff.
Put another way, I don't know who your banks competitors are, and you might not, but your bank thinks its competitors spam campaigns currently revolve around greenwashing and aspirational, so thats the kind of retention spam they send.
I had no idea their headcount was 70. It would be hard to maintain such a large staff unless research + events + advertising + other were doing really, really well.
It's not advertising that's the problem as many in the comments seem to think; it's the shitty type of ads these 90s websites were all built around.
The recent Marissa Mayer piece in Medium [1] made much of the fact that her big accomplishment so far was transitioning from the old dying Banner ads model to a mobile/video/social/fake content friendly model.
Also consider this bit from buzzfeed [2] which I first saw from stratechery's great article [3] on them.
The banner ad, whose decline Farhad Manjoo recently celebrated, was also born during this era and created a business model in which clicks are tied directly to dollars — something many people assume is still how all online publishers make their money. But BuzzFeed has never sold a banner, and I couldn't even tell you how many monthly page views we get. And so our business model at least moderates that incentive to drag every last click out of our audience.
Taking venture capital and starting at -$22M doesn't help.
There have been a lot of very successful and profitable media companies[0]. The industry isn't broken (far from it), just some of the models are.
This also isn't a new revelation: Arrington wrote a post on TechCrunch in 2008 warning other bloggers not to raise money[1]
Re: the effectiveness of advertising. This is a $120B+ annual industry with entire billion-dollar sub-industries involved in measuring its effectiveness and optimizing value. If it didn't work it would have slowed, shrunk and or shut down a long time ago - but rather it is growing insanely each year. Advertisers and the over-qualified engineers working in adtech are not idiots.
[0] TechCrunch (disclaimer: worked there, profitable - sold), ReadWriteWeb (profitable - sold), Huffington Post (profitable, sold for $350M+), ProBlogger (profitable), etc. etc. etc.
I'm not sure that all the examples you cite are evidence of very successful and profitable media companies. ReadWriteWeb was acquired by SAY Media for less than $5M and they cut it loose two years later. HuffPo wasn't turning a profit for AOL in 2013, and Tim Armstrong wouldn't say in Dec. 2014 if it was earning a profit, which basically means it's not. In any case, HuffPo's revenue is largely driven by rehashing the original reporting of other outlets, and that is definitely not sustainable journalism.
RWW operated for 8 years with no money raised and then cashed out when Richard retired. HuffPo makes more in revenue p.a than what AOL paid for it. They may have only technically not been profitable at acquisition because of their reinvestment in business. There are a ton of other profitable, bootstrapped media businesses - I just happen to know those I mentioned.
As a 100% layman, I spent 20 mins thinking about the ad issue. The easiest way out I can find is to have some kind of location-based ad system to increase the degree of connection between a user and the ad content. Is it feasible technically and commercially? I would like to learn more. Thanks.
That's already being done; in mobile based on your GPS/cell location and otherwise based on your IP (not very specific, but a general location work pretty well).
Working for a UK-based division where our corporate Internet gateway ingress/egress is in San Jose, things do get confusing - for example, when I browse ebay.co.uk, (in my lunch hour, of course!) without logging in, the postage charges are astronomical as ebay assumes the UK sellers have to ship to California.
Yes, I know. But most of the time we see ads on bigger screens. The location-based ads have way less location awareness in my experience. I guess, besides the ads from your neighbours (location aware ads), there should be some kind of quicker balance feedback between ad bidding system and what user really pays attention to. Just think about the ads we see in the paper-media-only age, different ads occupied different places. Online ads have not reached that point yet. I wish we could get to that point earlier to make more quality content makers' life easier sooner.
So at $4.56 per thousand views, assuming one ad per page, even if an article does 20K views, that's only $91. This is why news organizations look for differentiators; it's what we did when I was at Wired and CNET, though I was on the editorial side, not advertising. Unfortunately not all news organizations succeed; Gigaom did events and had a paid research arm, but that wasn't enough. I'm also still mourning Dr. Dobb's, which I first read as a teenager. :(
I am managing a 7 digit banner ad budget which helps my client generate a profitable 8 digit income in education business. So no display advertising isn't dead for advertisers, because possibilities are more. The problem with Gigaom and DDJ is that they have low capacity with not much relevance advantage. One single programmer can run a web site with tenfold their capacity with a fraction of their cost.
In contrast one can claim banner (outdoor, indoor or web) never really worked except for some carefully chosen "success stories", and now advertisers can measure.
What does "low capacity with not much relevance advantage" mean? My understanding is that DDJ (at least) has great content that "one single programmer" couldn't hope to match.
Relevance advantage means that a site is so big and important in a broad category that it's worth it for advertisers to pay a premium to get frequent views from its readers( think of how TechCrunch is so central to the tech community)
You've hit on a key point: the ability to measure ROI with digital media has drastically changed the advertising landscape. Magazine advertising has always had notoriously low impact, as an example.
Considering that prior to the web, the most trackable advertising was direct mail.
I'm sure that is true, but aren't we overlooking the fact that the tech sector has an extreme amount of content to offer compared to any other sector? Plus there's a large amount of content that can be had straight from the source.
> Plus there's a large amount of content that can be had straight from the source?
Exactly. How many articles have been written in the past day on the new MacBook that are actually just worse than reading the Apple.com page itself. Filtering can be done by link-sharing sites like HN and Reddit.
The curse of Dr. Dobbs was simply that the content was so good the ads were not able to compete for relevancy. This is a weird paradox: really good content attracts audiences but crappy content makes them click through on ads (and probably still not purchase anything but at least there is some effect for the ad buyer they can measure beyond 'impressions').
Lots of fond memories of the print edition, that's where I learned a whole bag full of useful tricks when information was a lot harder to come by than today.
Some do well with real content. Economist is well known on HN. But the Economist charges a fee.
In .de, SZ, Zeit and Spiegel appear to do tolerably. (I subscribe to the first of the three.) Two of them charge real money, though, and perhaps the third too, I wouldn't know.
The Germans have a proverb for this. Wer zahlt, schafft an. Liberally translated: Who pays, decides what's paid for.
That's not necessary, LWN.net (Linux Weekly News) is an excellent site with in-depth articles. It is funded by subscribers, and it seems to work relatively well for a long period already:
Don't confuse a lifestyle business that people do as a labor of love with a successful full media organization that can afford to pay people salaries and benefits. Not diminishing LWN, but it's not the same as a Dr. Dobb's or GigaOm.
Also, most successful smaller media publishers who are not purely ad-based have diversified into other areas.TidBITS is a smaller operation and can pay some salaries, but they supplement with their fantastic book business too. They diversify and have built what they can sustain
Jon Corbet's been pretty open that LWN's at best barely broken even, if that. Though last I recall his talking about this was a couple of years ago.
I've actually drifted off it in the past few years largely as I'm simply not tracking Linux-related stuff all that closely any more. Though for that, LWN is absolutely excellent. It's certainly seen numerous other contenders buried.
Personally I like news media / journalism to be operated as non-profits funded by governments, foundations, and individual donors. I am happy to pay for content.
> effectively nobody ever buys anything by clicking on a web ad
I know I never did - at least for banner ads and other CPM advertising, but I'm not so sure it applies to the CPA sector. My impression (no pun intended!) is that sector is in a growth phase.
On the plus side, if this means the return of advertising revenue to print media, that's an interesting development. If it doesn't, then ... where is the advertising spend going to go? Mobile? I think mobile advertising is even more universally reviled than CPM web advertising! Should the penny be dropping (pun intended) there, as well?
I had assumed GigaOM's web property was there to lend brand to GigaOM Research, versus the advertising angle. The ability of journalists to make ad revenue is very disappointing and unfortunate across the board, though it can also be said there's a lot of really poorly researched tech journalism out there too.
If the goal wasn't a self-sufficient web business, this seems to imply (maybe?) that the "research/analyst bits were also unsuccessful.
Which I can also believe, because Tolkein's "Go not to the Elves for counsel" was somewhat written about analysts - "for they shall say both no and yes".
I believe the issue is less that advertisers are unwilling to buy display web ads; it's more that they no longer place a premium value on buying them from branded publishers when they can reach the same users on many different websites with programmatic buying.
This hugely devalues quality publishers and increases the value of lower-investment publishers who successfully create a lot of pageviews. The latter inventory used to sell for bottom-of-the-barrel prices, but advertisers have decided it's pretty similar in value to reaching the same user on a high-quality site.
The best offensive weapon quality websites have against this trend is native advertising: create high-quality sponsorship offerings that commodity display ad impressions can't directly compete with.
I think one of Om's earliest blogs (may have even been an acquisition) was about being a digital nomad. I was just getting in to tech/startup news at the time and for whatever reason, that one stuck out to me. (Can anyone find a link?) I've always enjoyed reading their content over the years and will be sad to see them go.
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[ 2.4 ms ] story [ 259 ms ] threadhttps://twitter.com/mathewi/status/575090046572736512
My totally unfounded theory/opinion is they were overfunded and the investors wanted to get out after not seeing the growth levels they wanted (which in publishing is not a big surprise, you almost never see SaaS or consumer app levels of growth there).
Really sad to see it go.
Sounds like a fairly hostile takeover that no one was expecting. I wouldn't be surprised to see something very similar be spun out of it, perhaps not bearing the name of the departed founder.
http://om.co/2015/03/09/a-statement-about-gigaom/
Even better: Can anyone advise what publications they would read if they were interested in innovations in technologies and in their applications, rather than in products? That is, I'm interested in innovations or developments like IoT or blockchain or HTTP/2, and innovative ways to utilize them. Generally I'm not interested in something like the latest MacBook Air; it's significant in the marketplace, but for my purposes it only marginally improves and repackages existing tech.
I have visited his writings in the above link more than the actual Gigaom site. One thing i will say, is that there are some really talented journalists at Gigaom.
(If you happen to know an address for an RSS feed of Technovore, I'd be very appreciative. Fast Company seems to offer only their entire site's headlines (http://feeds.feedburner.com/fastcompany/headlines), which has too poor signal-to-noise to add to my feeds.)
EDIT: Nevermind, found it: http://www.fastcompany.com/user/om-malik.rss
Here's a list in no particular order:
1) recode
2) pando daily
3) techcrunch
4) techmeme (another good aggregator)
5) Mit tech review
6) New York Times Bits
7) WSJ D
8) CNET
9) Mashable
1. for me.
Such a shame. Was always a big fan of Om from back when he'd appear on the Cranky Geeks show and loved what he built at GigaOM.
Almost unbelievably, on mobile my favorite feed reader is Pulse, which LinkedIn bought a year or so back. I've used Feedly, too, and Google's Newsstand, but Pulse seems easier to scan through.
For tech-specific news, HN is the best source to meta-news that's actually technical, as well as human curated weirdness. /r/programming, /r/technology, /r/android, etc are all good, too. Whenever there's a big trade show or launch event, I usually check Pando, TheVerge, UberGizmo and a few others (Re/Code, Mashable, VentureBeat, etc). I have an IFTTT recipe that pushes any new Android app disassembly article from Phandroid and Android Police (they do a FANTASTIC job of analyzing Google app updates for unspecified changes, and also always rehost the APKs). I look for in-depth product reviews from Anandtech. I laugh at XKCD's always timely cartoons.
Note that for the ones I follow via a reader, I almost never go to their site directly, and never see any ads. I do use an adblocker (uBlock), but I am considering uninstalling it because of memory consumption. I'm on a Chromebook most of the time and between Gmail & adblockers, 4GB of RAM just isn't sufficient.
I hadn't heard of the site until recently and now I've seen a few fairly low-brow articles from it on the front page here in the last 24 hours.
If there's a higher-brow article on this story we'll happily change the url.
Gigaom had an excellent writing staff, hope they get back on their feet quickly so we can keep reading their pieces.
Sure, the company didn't go down the clickbait road, but it also had come up with revenue models that made up for that. Beyond events, they also had a research group—something that, to a degree, arguably made their real competition Gartner and Forrester.
I wonder what role Om stepping away from the day-to-day played in this. What he said a year ago makes this turn of events seem shocking: https://gigaom.com/2014/02/20/now-that-gigaom-is-all-grown-u...
I really enjoyed it - good people and talks.
There weren't, however, many customers there. It was all other people selling stuff. So I didn't go again.
The recent wave of data related businesses are now generally at the phase where they need to meet potential customers from corporates at events.
Not sure how/if this affects business model though! The profitability of events is opaque to me.
This could be a sign of things to come for other online pubs once the funding runs out. Too much competition, too little in the way of sustainable revenue sources, and not enough AOL acquisition cash to go around.
Oddly enough, the reason these folks are failing is that Google's CPC (the money they get for an advertising "click") has gone down Year over Year for the last 13 quarters. What that means is that if your web site depended on advertising from Google (and most do), and your traffic remained constant, you have seen a 33% drop in gross revenue over that same period. Google doesn't call out their click fraud numbers, but they do improve their ability to detect it over time, which means your "quality" click through rate has been going down as well, for a double whammy. So unless you can improve volume, you die. In their Q4 report[1] they make this note:
Network paid clicks, which include clicks related to ads served on non-Google properties participating in our AdSense for Search, AdSense for Content, and AdMob businesses, decreased approximately 11% over the fourth quarter of 2013 and decreased approximately 7% over the third quarter of 2014.
A third less advertising revenue on a 11% fewer clicks over all? Serious pain.
As of the fourth quarter, Google also mentions it is paying nearly a billion dollars a quarter ($968M) to get search traffic. If you're a GigaOm and your traffic is already generating less revenue and fewer clicks are getting through, you can't really add insult to injury by paying people to send you traffic.
[1] http://investor.google.com/earnings/2014/Q4_google_earnings....
And it seems that youtube users use Patreon now.
http://i.imgur.com/XIf0JRW.png
I really doubt any browser will start installing it by default, so I think adblock will be limited to: a) Really technical people (HNers) b) Friends of HNers that are bothered enough by the real web experience while on their friend's systems that they go ahead and install adblockers.
I don't see adblockers covering more than 10% of web users, and they're likely the least valuable 10% of web users (they may earn a lot, but they don't have burning holes in their pockets either).
The growth isn't driven by technical people any more; it's normal people who've grown up using web browsers and who don't think twice about installing an extension on Chrome. You're correct through that it is spreading through word of mouth. You can get more on the pagefair blog.
My point is that adblock usage doesn't seem to be nearly as prevalent as we assume - at work (where everybody has admin rights on their work machines) maybe 10% of the non technical users have it. The point that makes people install it seems to be youtube ads.
I guess:
1) You write articles that are exclusively marketed toward an HN crowd (adblock-heavy).
2) Some advertiser(s) were heavily directly targeting users at your site and stopped
3) Your traffic stayed the same, but because of changing search results, so you got more low-value traffic while losing high-value traffic
I'm down 75% as well, but it's largely due to my abandoning my pages and competitors making specialized sites on my niches.
Advertising is good at selling some products, but advertisers are spectacular at selling advertising. So we've had almost a century-long bubble in bullshit.
The best way you outsell other advertisers, masters of bullshit themselves, all spinning how effective their ad is, is by selling metrics alongside your advertising. Metrics are the anti-bullshit. Well, almost...
You want something that looks like "actual sales caused." You want to tell a guy, "pay me $10 per ad, and I will generate 10 sales, each giving you $2 profit you wouldn't have otherwise made. We'll split the winnings."
You want to claim metrics for sales caused, but you don't really want those exact numbers, you kind of want something that looks hard that you can spin. Something loosely correlated with "actual sales caused" where your art of bullshitting can get slightly better returns than the exact numbers would get. Play to your strengths, right?
So magazines come along with subscription numbers, and that's great sauce. Then television comes along with the Nielsen family and, ok, actually Nielsen starts way back with radio in the 1920s, but same idea. Radio/television advertising reaches the most people and every company starts to pay a premium.
Advertisers have the whole industry sliced, diced, catalogued and formulated. Superbowl is the premium end, free weeklies are the bottom of the barrel. Everybody has a place, but everyone's using the same game to guess at eyeballs, to guess at actual sales caused.
Suddenly, though, there's this new game on the internet. Not a lot of eyeballs at first, so it starts in free weekly category. Suddenly though, Google (and maybe some other companies) can tell you how many ads are actually getting action rather than just eyeballs.
It's a metric like we've never seen before, it's the killer metric. Sure, you could get this from surveys, or test markets, but this is like measuring everyone who sees the ad. It's pretty cool.
But remember, metrics this accurate are dangerous, it shows when advertising doesn't work too.
And a lot of advertising is spin, a lot of it isn't all that great, because advertisers are better at selling ads than they are at selling your product.
I hope someone tells me this is all nonsense, though, because if it's true, then Internet advertising is both absorbing the advertising industry then destroying it.
That'd be sad. I mean, sure, it's showing us which of our emperors are already naked. But it might mean the constant death of random content sites like this.
The second issue is alot of internet advertising is bullshit, including the metrics. Now, some things are good--actual-purchase links are decent data, but again that's really lead-gen not advertising.
If your lead already wants to buy your product, its too late for advertsing and you're really more into a different game. Nobody looks at an ad in the superbowl and the runs out and buy something 12 minutes later. The fact your narrative doesn't apply to that case is more a sign that something is missing in it, not that superbowl ads are mis-priced per se.
Ideally, you want to pay the ad platform for sending you a user who will buy your product. So you say something like: "I'll pay you X for every user you send me who buys something".
Great, right?
Except now the ad can simply optimize for users who were GOING to buy your product anyway. So now you've spent money getting users who would have been there anyway.
What you really want is to pay for users "Who buy my product, but would NOT have bought it without the presence of the ad". And that's a much harder thing to measure.
Brand advertising is built around the concept of "When a person is making a buying decision, I want them to buy my product."
We know it works, because when you stop doing brand advertising for things like Toilet Paper, Detergent, Toothpaste, Deoderant, etc... sales go down. And when you start the advertising again, sales go up.
Price, Value, Placement, and, obviously, competition are all conflating factors as well - but the underlying response to advertising has been pretty consistent.
This should be inscribed in 50-foot tall letters of fire hanging in the air above Silicon Valley.
Advertising wasn't (and isn't) valueless, but the benefits were overextolled.
There is something else at work here though. It could be that people were overpaying for advertising, but it doesn't cost a lot more for a print ad than it would cost to have the ad printed and mailed to the same number of people who subscribe to the newspaper. The newspaper makes money because they put your ad in the newspaper they were already going to print and deliver and then they get to stick your ad money in their pocket. It's a nice deal for them.
But the internet equivalent of direct mail is spam. Or mailing lists to be more charitable. In ether case there is no printing and delivery cost. And the advertiser will now also have their own website which anyone can go to and view their products at trivial expense to the advertiser.
So sellers of advertising are no longer providing printing and delivery services or access to finite broadcast airtime. The equivalents of those things are no longer scarce or expensive.
The only thing they're selling is the ability to put your ad in front of customers who otherwise might not see it. Which might still be valuable if they had some kind of exclusivity in providing that, but they don't. Eyeballs aren't scarce either. Everybody visits many websites every day. The advertiser can get their ad in front of the customer by putting it on any subset of those websites, which then have to compete with each other for the advertiser's money.
So the price of advertising goes down. Somewhat fortunately for the likes of Google, then the Jevons paradox kicks in and people realize that if advertising becomes cheaper then it's profitable to buy more of it. So companies aren't spending less money on advertising.
But there are still many times more people selling it. And if companies spend twice as much on advertising but there are twenty times as many websites offering ad space, at the end of the day they each end up with ~10% of what they used to.
> In 2008, our company decided that we would not pray at the altar of pageviews and advertising metrics that do nothing but devalue our readers’ time and attention. Instead, we opted to take the road less traveled — subscription revenues.
https://gigaom.com/2014/02/20/now-that-gigaom-is-all-grown-u...
The post described their pivot into another line of business. (I'm not sure how much Gigaom relied on subscription revenue vs. advertising.)
I'm in the category where I don't need ads, I need timely and well categorized (machine sortable; accurate) results for product requests that I have when I discern a need.
I don't fell bad at all about running an adblocker because I would never have clicked on the ad to begin with (it also saves bandwidth and eyebleach); unobtrusive well placed and related text ads /might/ remind me of a need I had been meaning to fill.
I suspect that metric is nowhere as accurate as most people believe it to be. But I agree with the spirit of this message: a lot of the BS is getting exposed.
There is some confusion as to what magic actually is. I think this can be cleared up if you just look at the very earliest descriptions of magic. Magic in its earliest form is often referred to as “the art”. I believe this is completely literal. I believe that magic is art and that art, whether it be writing, music, sculpture, or any other form is literally magic. Art is, like magic, the science of manipulating symbols, words, or images, to achieve changes in consciousness. The very language about magic seems to be talking as much about writing or art as it is about supernatural events. A grimmoir for example, the book of spells is simply a fancy way of saying grammar. Indeed, to cast a spell, is simply to spell, to manipulate words, to change people's consciousness. And I believe that this is why an artist or writer is the closest thing in the contemporary world that you are likely to see to a Shaman.
I believe that all culture must have arisen from cult. Originally, all of the faucets of our culture, whether they be in the arts or sciences were the province of the Shaman. The fact that in present times, this magical power has degenerated to the level of cheap entertainment and manipulation, is, I think a tragedy. At the moment the people who are using Shamanism and magic to shape our culture are advertisers. Rather than try to wake people up, their Shamanism is used as an opiate to tranquilize people, to make people more manipulable. Their magic box of television, and by their magic words, their jingles can cause everyone in the country to be thinking the same words and have the same banal thoughts all at exactly the same moment.
In all of magic there is an incredibly large linguistic component. The Bardic tradition of magic would place a bard as being much higher and more fearsome than a magician. A magician might curse you. That might make your hands lay funny or you might have a child born with a club foot. If a Bard were to place not a curse upon you, but a satire, then that could destroy you. If it was a clever satire, it might not just destroy you in the eyes of your associates; it would destroy you in the eyes of your family. It would destroy you in your own eyes. And if it was a finely worded and clever satire that might survive and be remembered for decades, even centuries. Then years after you were dead people still might be reading it and laughing at you and your wretchedness and your absurdity. Writers and people who had command of words were respected and feared as people who manipulated magic. In latter times I think that artists and writers have allowed themselves to be sold down the river. They have accepted the prevailing belief that art and writing are merely forms of entertainment. They’re not seen as transformative forces that can change a human being; that can change a society. They are seen as simple entertainment; things with which we can fill 20 minutes, half an hour, while we’re waiting to die. It’s not the job of the artist to give the audience what the audience wants. If the audience knew what they needed, then they wouldn’t be the audience. They would be the artists. It is the job of artists to give the audience what they need.
-Alan Moore
To be clear: as-based sites can absolutely survive, but you need a sales team and good as-ops. The best CPMs are going to come from sales people getting deals done, not algorithms and text ads.
That market died in 2008.
The Internet is overflowing with ad-based sites, and will continue to be. Some will die, the radical majority will not. Five years from now there will be more ad supported sites than there are today.
The alternative to Google is to run your own advertising. This is especially true for sites with the scale of Gigaom.
Google is simply too good at matching viewers to advertising that is valuable to them (and therefore the publisher).
Running your own advertising is hard to be successful with, unless you can convince your advertiser to really overpay.
This is so wrong, I don't even know where to start. Google is very good at managing ad inventory and putting ads from said inventory in front of people. What they aren't good at (or even care about being good at) is getting the right inventory mix for the right site. That requires focused sales teams.
I'm not going to go down the native advertising rabbit hole because I don't have time ro have the conversation it needs to have, but I will say that whatever you think it is, it's both better and worse than that. And everyone who is successful in publishing does it to some extent, maybe just by a different name. And it's not new. It's been happening since the beginning of mass media. I can understand not liking advertorials or content that is unclear, but there are not plenty of people making native advertising that doesn't interfere with editorial missions.
>Running your own advertising is hard to be successful with, unless you can convince your advertiser to really overpay.
Again, this is not true. For a small publisher, running your ads is probably not worth the tech or sales investment. If you're the scale of a GigaOm, you need to take control of your ad game yourself. You can supplement sith ad networks, but the real money comes from doing it yourself. And with good ad ops, you can also provide a way better experience for the ad buyer.
Again, we're not talking about small one person publishers. We're talking t about sites that do millions of uniques and have full staff. If you're doing that and not maintaininf tour own sales staff, you're leaving money on the table, incompetent, or you have a product no one wants. Or all three.
Most adblockers are not on the computers of the HN-type, but rather installed by HN-type people on their friends computers. (ie: I've probably installed them on 5-10 systems). However, I probably wouldn't bother installing it on friend's phones/tablets, since I use mine, not their's.
On the negative side, mobile ads should pay less, since I'm less likely to whip out my credit card and buy something big/profitable on it. At least that is me anyway.
Current e-commerce experience on the mobile is "fiddle with your phone while trying to type up your account information, shipping address and billing data", so conversion rates are understandable abysmal, leaving mobile ad space to people promoting app installs.
All it means is a 33% drop per click, not per thousand visitors, or gross revenue over a same period.
As Google gets better at matching ads to users, CPC would be expected to go down, since there would be more clicks, and each click would therefore be less valuable, but there would be more clicks overall.
As a micro-publisher, the first question that friends ask to satisfy their curiosity is "How much do you get paid per click", and I have to answer that total revenue is all that really matters, not revenue per click.
Shouldn't improving fraud detection increase click quality?
In a purely statistical way, for any given web page getting 'n' views, and to keep our units consistent we will define pageviews/1000 as its traffic or T. Some fraction of those views will include an ad click. This is the 'Click through rate', and it can be calculated per thousand page view to get a 'CPM' or clicks per thousand. If you are an AdSense advertiser, Google will tell you what the CTR is for each page on your website that has AdSense ads on it. Each click gets some amount of money, this is the 'cost per click' or CPC. The product of those three, is Revenue per thousand or RPM, so
If you multiply CPC by .66 (down by 33%) that multiplication goes right through to RPM. (or revenue). Regardless of how much traffic you are getting.If Google got better at matching ads to users, then your click through rate (CTR) would go up because the ads would be more appropriate to what the viewer was looking for or interested in. It would not affect the cost per click which is what the advertiser is paying Google, you would just get more clicks per thousand.
Web site publishers really only have two things to try to optimize, click through rate and total traffic.
If you have heard the term 'click bait' it specifically refers to ways that a web site tries to increase its click through rate by making it more likely you will click on a link (or advertisement). This is the number a web site has under its control. It can also buy AdWords to put its content at the top of search results, or pay a company like OutBrain to put a link to its content at the bottom of an article, both of these are called buying traffic because you are paying someone (Google or the site running Outbrain 'ads') if someone clicks on that link and comes to your web site. If the amount of traffic increase * CTR * CPM (your marginal revenue gain) is greater than the amount you spent to get the traffic, then it is a good deal for you. However, for more and more people that number is negative, they just lose money faster because their ad revenue is going down and the amount they keep is further reduced by the cost of the traffic they bought.
And to your final question, yes fraud detection does improve click quality but that hasn't been reflected in advertisers willing to pay more to advertise as Google's sinking CPC number shows.
Uniques and pageviews were way up, click-through rate was near constant, but CPC got clobbered. It's incredibly frustrating and I can only imagine we'll see a great thinning of the herd across verticals very soon.
They are dependent on Google DoubleClick, but not on Google's CPC product.
I'd be surprised if AdWords/CPC made up 5% of GigaOm revenue (it would look more like: 50% conference business, 45% display ads, 5% other ads).
CPC is used as backfill on display - right now GigaOM have campaigns from Verizon, Tile and Asana running.
I was the editor in chief at Dr. Dobb's, which many of you know closed down in December. As I explained in my farewell editorial [1], our ad sales were squeezed by a comparatively recent phenomenon in media, which is a very steep drop in vendors' willingness to buy Web ads--a lifeline for most web sites.
The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad.
For certain consumer sites, that's a survivable problem. For example, Budweiser's ads aren't intended to make a sale, but rather to remind people of the brand. However, for many tech companies (those that aren't tier 1), they don't have the funds to do brand-oriented ads. Their ads need to result in clicks and purchases. And that's just not happening on pure websites. (FB and Twitter are a wholly different category.)
Personally, I expect that more web sites in the tech sector that have depended in the past on advertising will either fail or drastically cut back on their offerings.
[1] http://www.drdobbs.com/240169421
Edit: CPM pays 1/3rd the rate, but CPC ads make up 90% of revenue, which makes sense if they generally pay more. I run a rather diverse set of sites, but I stay away from tech.
It may still be effective for pure consumer-oriented services, but is IMO useless nowadays for B2B unless you're a large, deep-pocketed company.
The frustrating thing is that if you do find keywords that have low prices, google will refuse to run them for you because too few people search for it. Citing "low quality", google will force you to artificially inflate your CPC just for the privilege of running a niche keyword.
There is this idea that every day there are X people on the web searching for exactly what you offer, and if you show them an ad during the search: success. I believe this to be true, but google makes it all but impossible to pursue low traffic, niche searches. They literally refuse to run them.
Back before the internet was huge I used to subscribe to 3-5 computer magazines. PC Magazine, Wired, ... I don't even remember the other ones, probably mostly video game mags.
I used to look forward to the ads just as much as the articles because it was a way to find out about new products. Now though I need no such ads. I see the announcement on the various tech sites or from friends that read the tech sites. Almost zero need or interest in ads anymore and pretty much do my best to ignore them.
What was different then was that vendors viewed Web ads as an expensive form of advertising, but one which they had to do.
So far, this has protected Google from decline. Eventually Google will become a blue-chip stock because they can consistently match advertisements to users better than anyone else can.
Never. Publishers aren't dropping off in sum, just the bad ones are cycling out and are being replaced with more nimble, relevant, cheaper, etc. content providers (ie. Grandparents thesis is not correct and is anecdotal)
There are is more and better inventory than ever and more audience than ever and both are growing at staggering rates.
Your analysis is just plain wrong, by the way. Dr. Dobb's was punished for delivering content. Turns out, advertising doesn't work as advertisers hope on people who actually enjoy content. When you deliver actual content at some point in your career, you will discover this to be true as well.
There isn't a single cite in this entire thread to back that claim up outside of the anecdotal examples. The numbers for online ad sales and media revenue are all growing. The fact that the numbers haven't propagated through to Google's results is further proof of that.
Edit: some stats. The IAB report for last quarter shows 6% quarterly growth:
http://www.iab.net/about_the_iab/recent_press_releases/press...
Google ARPU for USA increased 7% last year:
http://www.statista.com/statistics/306570/google-annualized-...
Facebook ARPU is increasing 80% :
http://www.statista.com/statistics/234056/facebooks-average-...
Mobile ad growth up 83%:
http://www.wsj.com/articles/mobile-ad-spending-leaps-but-tra...
So where is this reported decline? It doesn't show up in numbers anywhere. There are profitable and well-run media businesses with both low and premium content in all sectors. I understand the tendency to want to blame this on some meta trend, but it just isn't there and can't be backed up outside of stories and feelings.
"Network paid clicks, which include clicks related to ads served on non-Google properties participating in our AdSense for Search, AdSense for Content, and AdMob businesses, decreased approximately 11% over the fourth quarter of 2013 and decreased approximately 7% over the third quarter of 2014"[1]
"Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 3% over the fourth quarter of 2013 and decreased approximately 3% over the third quarter of 2014."[1]
"Google's Ad-Price Declines Continue for 12th Straight Quarter"[2]
> There isn't a single cite in this entire thread to back that claim up outside of the anecdotal examples.
ChuckMcM cited Google's earnings report in a top-level comment[3] nine hours before you claimed there isn't a single cite.
[1] http://investor.google.com/earnings/2014/Q4_google_earnings....
[2] http://adage.com/article/digital/google-s-ad-rate-declines-c...
[3] https://news.ycombinator.com/item?id=9175725
AdSense struggles to distinguish between DrDobbs and a 12 year old writing about learning programming on Blogger. It performs when you have purchasing intent based sectors like gadgets, photogaphy, etc. (and a lot of blogs have built around that)
There is also a confusion here where CPM is used to refer to total CPC revenue divided by total pageviews. CPM is a specific display model where advertisers purchase Units of traffic volume and it scales out.
In any case neither DrDobbs nor GigaOM ran CPC ads in any significant volume (likely would only fill unsold display as backfill).
It is telling that somebody from DrDobbs - a display ad business would cite AdSense CPC performance or ad market performance as a reasoning for their failure. To me it just speaks to not understanding what went wrong.
Nobody should expect to take a premium magazine like DrDobbs, split it into online articles and then slap AdSense onto it and then sit back and count the money. That is totally unrealistic. It also doesn't work with just CPM markets either.
Premium brands require humans to sell them and not algorithms. If you don't have the scale to hire a sales team then you need to join a network.
There have been a few times I've seen an ad on a website that looked like it was for something I wanted, and wanted to click it.
The problem is that I pretty much ignore the ads while I'm reading the page content, and so I only noticed these ads when I'd finished the content and clicked a link to leave the page, and my eyes are wandering while I wait for the new page to start loading. I click back to try to get back to the ad, and something else has taken over its spot. I might refresh a few times to try to get the desired ad back, but that has never worked for me.
Absolutely. IMO, Banner Blindness alone is the biggest reason why web publishers are facing difficulty in monetising web inventory.
Many a times, people don't notice ads even if they were relevant to them, just because of banner blindness. In fact, 3 out of 10 display ads are never seen [1]
[1] http://www.adpushup.com/blog/banner-blindness/ (Disclosure: I wrote this)
But awareness advertising doesn't pay as well (yet?). The real money is getting people at the edge of making a purchase to make that purchase, whatever it may be. And the ability for the web (or any advertising, for that matter), is increasingly being called into question (or people are getting better at questioning such purchases).
Any relative or absolute numbers you'd like to share?
> The reason is that vendors have (finally!) discovered that effectively nobody ever buys anything by clicking on a web ad.
My favourite experience with this was when I was selling a computer case and researched its specs on newegg.com. Then for a while all I saw were retargeted ads from newegg trying to sell me that case. Nonono, I didn't have one too few computer cases, I had one too many. I was the complete opposite of their target audience, heh.
But it's always amused me (in a not very amusing way) that immediately after I purchase something I'm inundated with advertisements from the same vendor trying to sell it to me again. Big data is supposed to be about finding statistical relationships between events, right? In what world would the probability of someone buying something be highest when they're holding a brand new one in their hands?
What it really makes me think is the web advertising folks are pulling a con on their clients. They're not actually doing the critical analysis they promise but simply sorting by linear distance in n-dimensional space and hoping no one notices how useless the measurement is.
I agree. I think it would be very difficult for them to tell the two states apart, but I found it amusing.
A few years later my brother interviewed with them and they asked him how to solve that problem. I wonder if they were stumped, and if they were just looking for new ideas.
Yeah, I've had similar experiences. Back when I used to play Eve Online, I'd see banner ads everywhere for the game. Big screaming banner ads imploring me to subscribe now.
At the time I already had two accounts. By definition I was the kind of person who could not be advertised to, but the ad network was still putting effort into targeting me with those ads.
Oddly I almost never see WoW ads (excluding telly), but I do get the occasional email with free time/trials. Ofc they're all scams now, but once upon a time it really was a free upgrade...
Put another way, I don't know who your banks competitors are, and you might not, but your bank thinks its competitors spam campaigns currently revolve around greenwashing and aspirational, so thats the kind of retention spam they send.
Instead, we opted to take the road less traveled — subscription revenues. [1]
Which still did not bring in enough revenue.
[1] https://gigaom.com/2014/02/20/now-that-gigaom-is-all-grown-u...
The recent Marissa Mayer piece in Medium [1] made much of the fact that her big accomplishment so far was transitioning from the old dying Banner ads model to a mobile/video/social/fake content friendly model.
Also consider this bit from buzzfeed [2] which I first saw from stratechery's great article [3] on them.
The banner ad, whose decline Farhad Manjoo recently celebrated, was also born during this era and created a business model in which clicks are tied directly to dollars — something many people assume is still how all online publishers make their money. But BuzzFeed has never sold a banner, and I couldn't even tell you how many monthly page views we get. And so our business model at least moderates that incentive to drag every last click out of our audience.
[1] https://medium.com/backchannel/marissa-mayer-has-completed-s...
[2] http://www.buzzfeed.com/bensmith/why-buzzfeed-doesnt-do-clic...
[3] http://stratechery.com/2015/buzzfeed-important-news-organiza...
There have been a lot of very successful and profitable media companies[0]. The industry isn't broken (far from it), just some of the models are.
This also isn't a new revelation: Arrington wrote a post on TechCrunch in 2008 warning other bloggers not to raise money[1]
Re: the effectiveness of advertising. This is a $120B+ annual industry with entire billion-dollar sub-industries involved in measuring its effectiveness and optimizing value. If it didn't work it would have slowed, shrunk and or shut down a long time ago - but rather it is growing insanely each year. Advertisers and the over-qualified engineers working in adtech are not idiots.
[0] TechCrunch (disclaimer: worked there, profitable - sold), ReadWriteWeb (profitable - sold), Huffington Post (profitable, sold for $350M+), ProBlogger (profitable), etc. etc. etc.
[1] http://techcrunch.com/2008/03/19/more-bloggers-raising-money...
[0]http://techcrunch.com/2014/11/13/say-media-selling-off-readw... [1]http://www.businessinsider.com/aol-huffington-post-profit-20... [2]http://www.businessinsider.com/huffington-post-over-200m-rev...
In terms of companies sold, there's also CNET, which was sold for $1.8B to CBS in 2008. That was after an operating loss of $6M in 1Q 2008.
Some excerpts:
Average CPM for business & finance: $6.15
Average CPM for technology: $4.56
Average CPM for style and beauty: $1.48
So at $4.56 per thousand views, assuming one ad per page, even if an article does 20K views, that's only $91. This is why news organizations look for differentiators; it's what we did when I was at Wired and CNET, though I was on the editorial side, not advertising. Unfortunately not all news organizations succeed; Gigaom did events and had a paid research arm, but that wasn't enough. I'm also still mourning Dr. Dobb's, which I first read as a teenager. :(
In contrast one can claim banner (outdoor, indoor or web) never really worked except for some carefully chosen "success stories", and now advertisers can measure.
Relevance advantage means that a site is so big and important in a broad category that it's worth it for advertisers to pay a premium to get frequent views from its readers( think of how TechCrunch is so central to the tech community)
That's confusing to me, because the grandparent said:
> One single programmer can run a web site with tenfold their capacity
How could one programmer run a website with more manpower than Gigaom or DDJ?
Considering that prior to the web, the most trackable advertising was direct mail.
Wasn't it simply due for a shakeout regardless?
Exactly. How many articles have been written in the past day on the new MacBook that are actually just worse than reading the Apple.com page itself. Filtering can be done by link-sharing sites like HN and Reddit.
Lots of fond memories of the print edition, that's where I learned a whole bag full of useful tricks when information was a lot harder to come by than today.
In .de, SZ, Zeit and Spiegel appear to do tolerably. (I subscribe to the first of the three.) Two of them charge real money, though, and perhaps the third too, I wouldn't know.
The Germans have a proverb for this. Wer zahlt, schafft an. Liberally translated: Who pays, decides what's paid for.
The debased version being, "Who has the gold, makes the rules." (http://quoteinvestigator.com/2015/01/11/has-gold/)
Sometimes in gloomier moments, I am reminded of the gap between the two.
http://lwn.net/
Also, most successful smaller media publishers who are not purely ad-based have diversified into other areas.TidBITS is a smaller operation and can pay some salaries, but they supplement with their fantastic book business too. They diversify and have built what they can sustain
I've actually drifted off it in the past few years largely as I'm simply not tracking Linux-related stuff all that closely any more. Though for that, LWN is absolutely excellent. It's certainly seen numerous other contenders buried.
I know I never did - at least for banner ads and other CPM advertising, but I'm not so sure it applies to the CPA sector. My impression (no pun intended!) is that sector is in a growth phase.
On the plus side, if this means the return of advertising revenue to print media, that's an interesting development. If it doesn't, then ... where is the advertising spend going to go? Mobile? I think mobile advertising is even more universally reviled than CPM web advertising! Should the penny be dropping (pun intended) there, as well?
If the goal wasn't a self-sufficient web business, this seems to imply (maybe?) that the "research/analyst bits were also unsuccessful.
Which I can also believe, because Tolkein's "Go not to the Elves for counsel" was somewhat written about analysts - "for they shall say both no and yes".
This hugely devalues quality publishers and increases the value of lower-investment publishers who successfully create a lot of pageviews. The latter inventory used to sell for bottom-of-the-barrel prices, but advertisers have decided it's pretty similar in value to reaching the same user on a high-quality site.
The best offensive weapon quality websites have against this trend is native advertising: create high-quality sponsorship offerings that commodity display ad impressions can't directly compete with.