How do you make money from a website? It’s a question that’s haunted marketers and content creators alike for years now. Unless you’re selling a physical product, most people aren’t willing to pay for written content or digital services. As a result, it falls to advertisers to make up the cost of hosting millions of users a day.
The portents for online advertising, however, are not good. We all know about the rise of adblocking, but marketers and end users seem to be testing each other’s limits. Desktop adblocking software had been downloaded over 500m times by 2016, while mobile adblocking was also catching up, with almost 420m devices reporting some kind of ad obstruction.
As more and more traffic moves to mobile, where screen real estate is at a premium, things seems to be coming to a head. The question is this: can advertising find a way to be effective and user friendly, or is a different approach to online revenue required?
The result for the marketing industry and site owners is a massive shortfall, with estimated losses by 2020 of $35 billion. As a result, they are going to greater lengths to prevent ads from being blocked. This has included striking deals with the ad blocking companies themselves to whitelist certain ads, or create tiered services for free and paid members.
Ironically these companies often don’t receive compensation for their own product, as their software is provided for free. This is the issue with online advertising and paid content in a nutshell. Unless you’re a Netflix, offering both a quality service and monopolising content in a certain niche, someone will be able to undercut you. And audiences, it seems, are fickle.
Many different approaches have been trialled to remedy this. One of the most popular (and contentious) is to make ads more intrusive. The old style pop-up ad may have fallen out of favour, but it’s been replaced by auto-playing videos and full screen ads. These guarantee that you will at least have to look at or listen to the ad as you attempt to close it, yielding guaranteed engagement.
The obvious issue is that they can be extremely annoying. People may expect and tolerate the ads between TV shows, but the online ecosystem is different. When you’re flicking through several websites in a minute, that could mean several adverts before you’ve even consumed the content. In this scenario, it’s not hard to understand why people would seek to avoid ads altogether.
The websites themselves are increasingly opting to step in. Many now carry warnings to desktop ad blocking software users, or bar entry to the site entirely. It’s arguable that if all major websites do this, the cumulative effect will be to disincentivise the use of ad blockers entirely. Other however argue that the effect will be similar to blocking piracy websites. Online, no attempt to wall off premium content seems to ever be infallible.
That’s not to say that inroads can’t be made, however. Services like Netflix and Hulu have had a conspicuous effect on TV and movie piracy, at least for the content they carry. Making a lot of good content available at a cheap price can be a simple and elegant solution. Just as important is the process of accessing it. Netflix in particular has won plaudits for its easy interface, intelligent recommendations and speedy streaming tech.
Something similar could be applied to websites. News content, podcasts, blogs and commentary could all be corralled under large networks with excellent interfaces. For many people, Facebook already holds this position: nearly half of US adults count it as a primary news source. And Facebook’s advertising revenues are enormous, totalling $26 billion in 2016 – revenue which could easily be shared between content creators.
Of course, this is pie in the sky thinking. But the principle holds true. People are clearly willing to put up with adverts if they enjoy the service that carries them. The stats back this up: Hubspot reports that while 83% of those surveyed would block all mobile ads, 68% were content with seeing ads that aren’t intrusive. The fundamental concern should be achieving that balance between understatement and effectiveness.
One increasingly popular option is native advertising. In essence, this means a piece of copy with the appearance of a genuine article, but which is actually a masked ad. An entire article will be written with the same or similar formatting as a normal one, but with a small disclaimer. Sometimes this is written by a company representative, offering genuine insight while also advertising their service.
Native advertising has faced some criticism on the grounds that it is too covert. This is a legitimate concern, at least to the degree that it affects a business’ image. Several studies indicate that children and teens can’t effectively discern between real and ‘fake’ news, or Google ads and genuine search results.
The great benefit of this content however is a genuine veneer of legitimacy. As well as looking professional and carrying brand authority, most native ads in major publications are subject to the same editorial standards as other content.
Fundamentally it is no different to an opinion section like The Guardian’s Comment is Free. The difference is that while those individuals are selling their personalities, native ads sell a company.
Perhaps the most exciting channel for online advertising is video content. For all the conjecture surrounding YouTubers, only the most popular channels make a significant amount of money. With more than 2,000 channels boasting a million subscribers or more, there exists a real opportunity to work with content creators to reach highly valuable young audiences.
Advertising exists on YouTube through traditional pre-reel and mid-show slots, either of 5 or 30 seconds. But these ads are also targeted by adblocking software. The real benefit is in working adverts into the shows. As each episode of a Youtube series is often 10-15 mins long, a short advert is unlikely to be skipped.
While creators tend to be fairly approachable about ad content, they can be picky about the topic. Youtube viewers tend to rally against any advertising, accusing the channel of selling out. Many channels have successfully turned this around however by putting their own spin on ads.
Channels like Game Grumps have taken to acting ad copy out in the form of bizarre comedy skits. While they are also very selective about which ads they accept, there is a whole gamut of topics to choose from on Youtube. If you can marry your product with something the Youtuber and their audience like – tech, gaming, pop culture, fashion – it can be the most effective online tool there is.
Header image by Daniel Oines