ChasNote

eMarketer predicts that spending on desktop ad banners will peak in 2014 at $39.35 billion, and then will slide south in subsequent years as digital ad dollars move to mobile. By 2017 ad spending on non-mobile banner ads will be down around 2012 levels.

A major reason for the shift toward mobile is simple: With more than half of US mobile users now on smartphones, and time spent with mobile devices increasing each year, many digital publishers are looking to shift ad revenues to mobile. Smartphones and tablet devices also account for a growing portion of US retail ecommerce sales, further contributing to advertisers’ desire to shift dollars away from desktop.

Logical enough.

But I have to wonder if there’s something else. Since the beginning, the banner-industrial complex* has been measuring its success by clicks, even though we’ve all seen the data telling us a single-digit percentage (8% back in 2009) of Internet users are responsible for that vast majority (85% in 2009) of all clicks on banners. Those heavy clickers, meanwhile, tend not to come from the demos that most advertisers intend to reach.

And it gets worse. The latest numbers from Comscore show that 46% of desktop banners are never seen by human eyes. On ad exchanges like Google’s AdX, according to Piper Jaffrey, that number might be as high as 80 to 90%.

Were it not for the industry’s own bad behavior, I expect that eMarketer chart would have a longer up-and-to-the-right curve to it. Let’s not blame it all Apple and Samsung for making such cool mobile gadgets.

(*I think Brian Morrissey came up with that phrase.)

If you believe the latest commercial from Philips Norelco, better grooming will make you want to get busy with yourself, in that way a carnal bunny rabbit would. In order to get media outlets to run the spot, though, Philips Norelco can’t actually use the word fuck. (I’m not even sure I can use that word here on ChasNote.) Or they can, but they need to bleep it out themselves before anyone will broadcast it.

According to public radio’s Marketplace:

We’re hearing a lot of bleeping in ads these days by mortgage refinancing services, mattress stores, and even Frank’s RedHot sauce. One ad by Frank’s RedHot has a little old lunchlady who explains to kids why her sloppy joe’s are so good: “Frank’s RedHot. I put that s— on everything.” But even when bleeped, profanity can be jarring.

I give Philips Norelco an A-plus for the above spot. It’s not especially surprising (I’ll give a prize to anyone who can find me a male groomer ad that doesn’t make a crotch joke, some sexual innuendo, a reference to kiwis* or mowing lawns), but it’s funny and squarely on brand. The bleep technique, though, is a gimmick that’s probably already lost its effectiveness. Unexpected sounds are only unexpected the first time you hear them. Now that everyone’s bleeping, we’ll go back to ignoring all the commercials but the good ones.

*

According to Mary Meeker, we’re now uploading and sharing more than 500 million photos a day. By this time next year it will be a billion a day.

Which is awesome — pretty soon I won’t need to feel self-conscious about sharing so many pictures of my kids on Facebook. (I’m pretty darn adorable, just for being related to them — right?!) My narcissism, at least on a relative scale, will experience a refreshing decline as greater narcissists outpace me.

But here’s the rub. The vast majority of those photos are posted to ad-supported sites — Facebook, Instagram, Twitter and Tumblr — or apps that are free to consumers (such as Snapchat) and therefore will likely pursue some kind of ad model eventually. Advertisers almost always follow consumers to a new media property once the sheer number of consumers gets too large to ignore. Take the recent rise of WorldStarHipHop. According to American Public Media’s Marketplace:

In recent days, ads for Fiber One, Walmart and Bloomingdale’s have appeared on WorldStarHipHop. O’Denat [WorldStarHipHop's founder] says the site’s racier content used to be a problem for advertisers.

“Advertisers were afraid of us,” he said. “We were kind of risque. We had girls in thongs, fights. Not until later on they decided, well, the site is too big. We’re just gonna have to work with them.”

When Facebook landed in hot water this week, though, it wasn’t for thongs or fights. It acknowledged that its “systems to identify and remove hate speech have failed to work as effectively as we would like, particularly around issues of gender-based hate.” More specifically, as one advocacy group brought to light, Facebook ran advertising on pages with names like “Violently Raping Your Friend Just for Laughs.” Oy. I’m betting Facebook has already rolled out a solution to prevent this kind of thing from happening again — software has gotten pretty good at reading text on a page and understanding when that text is objectionable.

Managing brand safety is really hard to do, though, when it comes to photo content at enormous scale. It’s still a whole lot easier to flag the word “rape” than it is to recognize a visual depiction of the crime inside one of those hundreds of millions of new photos that its members publish to the site each day. Advertisers are more than eager to pitch their wares to the enormous audiences at Facebook, Instagram, Twitter, Flickr, Tumblr and Snapchat — assuming they won’t tarnish their brands in the process. Figuring out that last part, especially as it pertains to user-submitted photos, is fast becoming a ginormous marketing opportunity. A billions-upon-billions of dollars opportunity.

(Disclosure: Until recently I worked at Luminate, one company that’s working on aspects of image recognition, including a visual brand watch system. I hope they succeed, partly because the online ecosystem will benefit from happy, confident advertisers, and partly — let’s be honest here — because those cute kids you see too often on Facebook want to go to college some day.)

Pearl Cantrell, 105, credits her longevity on a daily dose of bacon. Thinking fast, Oscar Mayer sent out the Wienermobile to take Ms. Cantrell out for a drive. Take that, Oreo.

Full story at NPR.

I wonder if I’ll ever get tired of the tattoos as advertising story. I doubt it. Because it’s such a silly idea for everyone involved — the participants inevitably trade their fleshy (and permanent) billboards at too low a price, and the corporate sponsors tend to pay too much for a short-lived PR stunt — it always strikes me fresh and therefore interesting. When I say interesting, mind you, I mean interesting enough to post it to ChasNote and make it the top story on my Twitter feed for the next 20 minutes. Not interesting enough to find out more about Rapid Realty or its value proposition, or interesting enough to remember its name tomorrow, even though I’ve taken the time to write it on my site. From Ad Freak, where you can also see interviews with several inked employees.

Some 40 employees have already done so—either because they love the firm, need the money, or both. “I was like, Why am I throwing my money away when I could get myself from $25,000 to $40,000 for the same amount of work?” Stephanie Barry, who might not understand what 15 percent means, tells CBS News. “My wife was a little concerned but I said, you know what, it was the best commitment I could think of,” said another employee, who’s been on the job all of one month.

I sure hope he’s got a likeness of his wife tattooed on the other bicep!

Screenshot from Elliot Loh, who was reading Serious Eats on his phone when a McDonalds McChicken Deluxe ad served up at the bottom of an article about whether or not McDonalds hamburgers decompose over time. Who knows, maybe an article beating up on McDonalds hamburgers boosts sales by making McChicken Deluxes sound relatively more appetizing.

From the IAB’s report on US ad spending for 2012. Digital ad spending is up 15% over 2011, with retailers (20%) and financial services (13%) representing the biggest spending sectors.

It’s interesting, though, to imagine this chart (as I’ve hacked together, above) if you remove one company from it, Google. When you subtract out international revenue and the former Motorola business (see Marketing Land), and you multiply the difference by 96% (the share of Google’s revenues that come from advertising), Google’s US ad revenues for 2012 were nearly $19 billion. Pulling Google out of the mix, US advertisers spent less than $18 billion on internet advertising last year — somewhere between newspapers and radio.

A chart created by Alan D. Mutter that plots US newspaper ad revenues against Google’s revenues (almost all of which are advertising). Note: Google numbers are global, while the newspaper numbers are US only. Google’s US revenues are closer to $16 billion.

From PaidContent:

The speed with which billions of dollars in advertising revenue simply evaporated over the past decade is incredible: as [economics professor Mark Perry] notes, after adjusting the figures for inflation, total print ad spending last year of about $19 billion was below the level set in 1950. It took 50 years — a generation, in other words — for ad revenue to go from $20 billion to a peak of $65 billion in 2000, but it only took 12 years for that progress to be erased.

Last week the San Francicsco Chronicle launched a paid-subscription version its website behind a paywall ($12/month if you don’t already subscribe to the print edition), and the Washington Post plans to do the same later this year. In erecting paywalls, of course, neither qualifies as a trailblazer. Soon it will be hard to find a traditional newspaper that does not charge for access to some or all of its website. But in these early days, it’s also pretty hard to find an example of a newspaper (other than NYT) that’s experiencing gigantic success with its subscription digital product.

Eliza Kern, a 22-year-old reporter for GigaOM and PaidContent, argues that it will be an uphill battle for online publishers hoping to win subscription dollars, especially with respect to her generation of readers:

When I asked if anyone would pay for this content themselves if their parents stopped paying, hardly anyone said they would. The only media that most people said they would pay for was Netflix, and a few said they would subscribe to avoid paywalls on their local newspapers.

While she admits her survey isn’t statistically valid, she is surfacing the larger dilemma faced by nearly every digital publisher. CPMs — cost per thousand ad impressions — for digital advertising have always been lower, in most cases, than CPMs for print advertising. While industry-watchers predict rising CPMs across the Internet as a whole,

the bad news is that this CPM increase will be largely driven by adoption of the “viewable impression” standard, where advertisers pay only for for ads that are visible on the screen. For a lot of publishers this will mean fewer impressions, which could offset some of the CPM gains.

In other words, moderate improvement in CPMs coupled with a larger decline in valid ads per page will leave many publishers with less revenue per thousand pageviews (RPM). So it’s no surprise that the Chronicle and the Washington Post are launching paywalls; every digital publisher wants to bolster the income statement with paid subscriptions.

Nor should it be a surprise that while digital publishers want us to pay a subscription to read their unique, high-quality coverage, many are also chasing increased advertising revenues by churning out more, lower-quality content. On the surface anyway, the logic is simple: If revenues per pageview (the R in RPM) are going down, then increase the number of pageviews (the M) on which you can sell ads. The Huffington Post, for example, claims to publish between 1600 and 2000 articles a day, which works out to one new content nugget every minute. (Or there is the ad heavy / content light approach at Seattle PI.) It’s a great strategy for boosting pageviews — there’s something for everybody, there’s lots to share in social media, and there are headlines that will show up in search results for almost anything anyone could search for. But it’s also hard to maintain quality at a factory that pumps out widgets with that kind of velocity. What’s great for topline pageviews, I’d argue, isn’t likely to capture bottom-line reader immersion or a desire to pay attention with any kind of intensity — the kind of intensity that motivates us to pay for a publication because we can’t live without it.

(Source: Crowd Science.)

And it doesn’t capture the kind of reader attention that makes advertising work. The volume strategy drives more ad impressions and unique users, but the amount of time a reader might spend with each content piece will almost certainly decline — and with it, ad effectiveness. Click-through rates at Facebook, for example, are sliding as the site increases the number of ads per page. And if the pageview-chase increases ad impressions faster than ad dollars migrate online, publishers will face further downward pressure on rates.

I’m a fan of charging readers for great content, because I abhor the idea of a mediocre-content world. But before you ask readers for money, you first need an editorial formula that is so unique and so valuable that readers show signs of life-threatening addiction. That’s a tough aspiration if you’re banging out a story a minute, or if you’re fluffing your editorial output with wire stories that readers can find elsewhere. In my own experience, at publishers such as CNET and Digg, the let’s-pump-out-more-headlines approach inevitably leads to a corresponding dip in the engagement numbers — not exactly an equation for long-term business success if you count on renewals from advertisers and a growing audience of paid subscribers.

I wonder if it’s time for a more thoughtful approach to digital publishing. Figure out the stories you can own, the beats you can cover better than anyone else, and let the Internet’s content factories have the rest. You’ll lose out on a bunch of low-value ad impressions, but eventually advertisers will stop paying for low-value ad impressions anyway. In the meantime, you might just build a relationship with readers that opens their wallets.

(A version of this post originally appeared on Digiday under the title Modern Publishing’s Death Spiral.)

I was reading last week that The Huffington Post publishes between 1600 and 2000 articles a day, or one new content nugget every minute. This high-volume approach is working so well that they recommend brands do the same. No doubt it’s an approach that boosts pageviews — there’s something for everybody, there’s lots to share in social media, and there are headlines that will show up in search results for almost anything anyone could search for.

(Source: Crowd Science.)

But it’s also hard to maintain quality at a factory that pumps out widgets with that kind of velocity. What’s great for topline pageviews, I’d argue, isn’t likely to capture bottom-line reader immersion or a desire to pay attention with any kind of intensity — the kind of reader attention, ultimately, that makes advertising work. The volume strategy drives more ad impressions and unique users, but the amount of time a reader might spend with each content piece will almost certainly decline — and with it, ad effectiveness. In the meantime, pageviews across the web are growing faster than ad dollars, contributing to an erosion of ad rates.