Online vs Offline Advertising – an epidemic of irrationality.

Matt McAlister is unimpressed with online advertising.

OK, but take a look at OFFLINE dude! I replied to him over at his blog:

I think you may be overestimating the abysmal stats behind conventional advertising. Online, the 1% of people clicking into an advertiser's site at a cost of perhaps .15-.25 is very good. For example if you advertise a website prominently in a print publication you should expect perhaps 1/10th to 1/100th that level of performance (1 in 1000 to 1 in 10,000 readers) clicking to the site. I've tested this result using unique URLs and large print ads and the results were…underwhelming. I've seen no study to contradict my own results though I've noted many ad buyers tend to evaluate ad effectiveness in very questionable ways, such as when a $20,000 print campaign results in a few thousand leads and the conclusion is that it was a huge success.

Context ads have redefined the relationship between content and advertising in a positive way for both advertisers and publishers, and until a LOT more money flows from absurdly overpriced offline media to online, and thus starts to close the ROI gap, I think it is unreasonable to expect online ad models to change much, although do see them moving away from PPC and towards pay per action models which make performance measures somewhat more straightforward and PPC fraud almost impossible.
I think many online folks simply have no idea about the incredibly poor performance of offline advertising. My working hypothesis is that most advertising buys have negative ROI but that media companies and sales reps have done a very good job of convincing ad buyers that their advertising is working.

This article suggets that Google's failure to get high bids for print ads was an anomoly.  On the contrary I think this is a glimpse of the future of advertising, which will continue to move online until relative ROIs balance out.

Google selling print failed because print advertising is *dramatically* inferior to online and Google customers know this. Even online campaigns generally have negative ROI, but I suggest that most large, image driven print campaigns have negative ROI unless flimsy methodologies are used to measure ROI.

Few clients measure print effects well if at all, allowing advertising reps and companies to BS their way to keeping TV and print in play which is the main funding source for large media companies.

Based on my observations and experiments with print and online advertising in the travel sector It's an epidemic of irrationality, where few bother to measure ad effectiveness and those few who do measure it, and find print generally fails to deliver positive ROI, simply turn to subjective justifications for continuing failed campaigns.

About JoeDuck

Internet Travel Guy, Father of 2, small town Oregon life. BS Botany from UW Madison Wisconsin, MS Social Sciences from Southern Oregon. Top interests outside of my family's well being are: Internet Technology, Online Travel, Globalization, China, Table Tennis, Real Estate, The Singularity.
This entry was posted in Google, microsoft, news, search, SEO, travel, Web 2.0, yahoo. Bookmark the permalink.

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