Mathew's comments - Latest Comments in Denton: Everyone into the bomb shelter

Re: Denton: Everyone into the bomb shelter

bluelines — Wed, 12 Nov 2008 21:10:51 -0000

Something I'm sure will come out of all of this: Building online media businesses that are designed as "destinations" will make monetization extremely difficult. The key to surviving the downturn is to drive as much traffic as possible from search and monetize with AdSense and other transaction-based programs, rather than direct ad inventory or display ad networks.

MFA (made-for-Adsense) gets a bad rap, because traditionally it's associated with spammy content and black-hat SEO practices, but designing content-based businesses around monetizing search traffic is much more downturn-immune than, for example, the Gawker model.

Our site has just started to take off (now in the ~50,000 uniques / month range, up from about 30,000 last month and 15,000 the previous month) and the only monetization that works for us is AdSense and Amazon Affiliates. The display ad networks we've experimented with can't begin to come close to the eCPMs we achieve, and that's without a great deal of optimization.

The thing is, most people are still thinking about questions such as how to sell advertising against their content, rather than how to shift their mindset to serve ads to a different kind of audience.

I'm not suggesting that sites with a large regular community aren't important, but that they need to be combined with a monetization strategy that isn't about having a sales guy / sales force, a media kit and a bunch of traditional sponsorship and banner placement options.

Will spending on Google dry up and result in dwindling AdSense eCPMs? Possibly, but more likely that will hit those using AdSense purely as a last resort supplement with very little thought given to placement and SEO.

Re: Denton: Everyone into the bomb shelter

jonknight — Wed, 12 Nov 2008 13:02:26 -0000

I think that the problem with online advertising is, and has always been, that advertisers are using the wrong model. Internet advertising is NOT the logical progression from television advertising.

Re: Denton: Everyone into the bomb shelter

mathewi — Wed, 12 Nov 2008 12:18:37 -0000

A fair point, Rex. For what it's worth, I think Nick was making predictions
pretty much like that back in March, or even earlier -- and making cuts long
before anyone else. Your point about not relying solely on advertising is
also a good one.

Re: Denton: Everyone into the bomb shelter

RexHammock — Wed, 12 Nov 2008 12:12:13 -0000

Haven't we gotten to the point where predicting drought and pestilence is rather conventional thinking? I would have been impressed if Nick and others had been making such bold predictions about the death of online advertising back in, say, March. Ironically, today's "skeptics" are those who believe the group-think is wrong -- if you're optimistic, you're a skeptic. (For the record, I'm a pessimistic skeptic which means I don't think a 40% drop in online ad sales is likely -- perhaps, in some categories, but across the board, no. However, I've never thought depending on advertising alone is a great business model.