Friday, January 29, 2010

Website Monetization: Branding Must Replace PPC for Web Publishers to Receive Just Compensation

Web Publishers Must Insist on Branding-Based Internet Advertising


This post began as a lengthy comment I originally wrote in response to a story on Mixx called: Social Media Big Shots Meet in Switzerland to Discuss Monetization Strategies.
The article discusses how sites like Facebook and Twitter have millions of users spending hours each day on their sites, but they still can't seem to figure out a way to make money.
This one seems really easy to me. PPC is an advertising model that was designed for the exclusive benefit of the advertiser and broker at the expense of the publisher. Web publishers must abandon PPC (yes, even AdSense), and demand branding and repetition-based advertising, which has turned television, radio and even motion-pictures into cash-cows.
There is no legitimate reason in my mind why the advertiser will pay millions for an equal amount of televised repetitions that might earn a web publisher a few thousand dollars.
Has anyone else had any thoughts on this? Why is a person's attention span of let's say, five minutes watching television less valuable than that same person watching an online video for the same time period with comparable advertising built in?
The internet is still a tremendous bargain for advertisers looking to get the biggest bang for their buck. Before social media platforms can really start to become profitable, they need to negotiate more effectively, scaling back on PPC monetization and focusing on impressions and repetition of major brands who have yet to be convinced that branding can work as a form of online marketing.
As long as website owners, publishers and the likes are willing to settle for pennies in exchange for clicks, the big-money players in the advertising game are going to allow the web publishers to continue to be grossly under-compensated until the publishers demand a bigger slice of the pie.
It also doesn't help that the advertising inventory on the web is growing at a rate far faster than the demand, resulting in lower returns for web-based publishers and dirt-cheap rates for advertisers whose demand is far exceeded by the supply.
Ultimately, those who do their business on the web must create better ways of discerning quality content from garbage, and they must negotiate advertising arrangements that are oriented around the creation and promotion of a brand, not a specific site visitor's actions while on the site.
A major flaw with PPC is that low conversion rates (while widely and falsely) are assumed to be the result of poor traffic, the fact is that it is every bit as likely that the advertiser's actual site is lacking in quality, usability, visual appeal, etc. The publisher only gets payed when the visitor clicks a link and buys something. It is not fair that advertisers with low-quality websites can pay minimal rates for targeted traffic if the problem preventing conversions lies on their end.
The only advertising model that will achieve long-term sustainability for all involved parties is one in which the advertiser is compensated according to the amount of brand repetitions that publisher is able to deliver for the advertiser.
One other benefit of a branding model over a PPC model is that the problem of click fraud is eliminated, and honest publishers whose dishonest competitors repeatedly click their AdSense links in hopes of getting them blacklisted from the program will no longer be punished while the real culprit of the click fraud is paid for his or her efforts.
The current model is stupid, and web publishers cannot expect Google to implement a fairer model on its own volition. Publishers may even have to - dare I say - enter into collective bargaining with Google in order to accomplish this, but if it results in a sustainable system that works for everyone and is susceptible to a mere fraction of the routine click fraud (by criminals clicking ads on competitors sites to get them banned), it is a model well worth implementing and well worthy of the negotiations that must precede it.
The bottom line here is that if Beavis and Butthead were left alone in a room for an hour with a monkey and two typewriters, even they could easily come up with a better system for online advertising than the one being embraced at present.

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