Wired Conclusions

The ineffectual banner ad, created (indeed by the founders of this magazine) in 1994 – and never much liked by anyone in the marketing world – still remains the foundation of display advertising on the Web.
Wired, The Web Is Dead. Long Live the Internet.

The print cover of the 18.09 issue of Wired reads “The Web is dead.”  The turned pages – and the articles are page-turners - read:

The Web is dead.
Long live the Internet.
Two decades after its inception, the World Wide Web has been eclipsed by Skype, Netflix, peer-to-peer, and a quarter-million other apps.

Who's to Blame:

Us: As much as we love the open, unfettered Web, we're abandoning it for simpler, sleeker services that just work. Article by Chris Anderson.

Them: Chaos isn't a business model. A new breed of media moguls is bringing order – and profits – to the digital world. Article by Michael Wolff

from Wired, The Web Is Dead. Long Live the Internet.

Excerpts from "Them," Wired, by Michael Wolf:

"According to Compete, a Web analytics company, the top 10 Web sites accounted for 31 percent of US pageviews in 2001, 40 percent in 2006, and about 75 percent in 2010. 'Big sucks the traffic out of small,' [Yuri] Milner says."

"Content companies…depend on advertising to fund the creation and promulgation of their wares…The Web was built by engineers, not editors. So nobody paid much attention to the fact that HTML-constructed Web sites – the most advanced form of online media and design – turned out to be a pretty p- – poor advertising medium."

"According to a 2009 comScore study, only 16 percent of users ever click on an ad, and 8 percent of users accounted for 85 percent of all clicks. The Web might generate some clicks here and there, but  you had to aggregate millions and millions of them to make any money…"

"Even in the face of this downward spiral, the despairing have hoped.  But then came the recession, and the panic button got pushed.  Finally, after years of experimentation, content companies came to a disturbing conclusion.  The Web did not work."

"Since the dawn of the commercial Web, technology has eclipsed content.  The new business model is to try to let the content – the product, as it were – eclipse the technology."

The Web Is Dead? A Debate on the Wired site, not in the print magazine, features commentary from Tim O’Reilly, John Battelle, and Chris Anderson.

Our conclusions:

Handshake 2.0 – a content site – and sites like it – are competing for 25 percent of the pageviews not "sucked up" in the 75 percent of traffic heading to the top 10 Web sites.

If only 16 percent of users ever click on an ad, that means that 84 percent of Handshake 2.0's users – or users of a content site like it – would never click on an ad.

The Web may or may not be dead.  But, given those numbers, advertising as a revenue model for a content site is dead.

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Comments

  1. Although I do believe advertising revenues are drying up, I have to say, my annual income continues to rise modestly with the traffic increase.

    The increase is in more niche markets where the big traffic sites are not taking care of the needs of visitors.

    Ironically, my best traffic comes from my Hand Shake page
    http://www.speechmastery.com/hand-shake.html

    I still think, rather than it being dead, we are in the wild west of the web.

    Long live the internet.

  2. I think this brings up the amazing power of the internet though.

    Directly porting classic advertising into the digital world is not working. But there are tons of new models of revenue generation being created and refined every day!!!

    I know as a user the first thing I do is install an ad blocker on my computer. But I have recently spent $200 with one person and about $50 with another because their sites provided value and I wanted more. That does not sound like much but for someone with limited income at the moment it was a hard decision, and for the first I am one of thousands of people spending $100 to thousands with this person.

    A website and blog are an engagement and advertising platform for the rest of your business NOT your sole business. Unless you are one of the big 10, then maybe it can be.

    We can freak out about how classic business and ad models are not working or we can start actively innovating and utilizing the new ones that we have access to.

    Which will it be?

  3. Thanks, Allen.

    “… tons of new models of revenue generation being created and refined every day!!!”

    Would welcome examples! Advertising, subscription, freemium, sponsorship… What other online revenue models have you seen and what sites are doing them? Please share more if you care to. Thanks!

  4. While using the word “tons” may seem a bit sensationalist I stand by it.

    The more obvious successful models are Sponsorship (Robert Scoble) and Freemium (Evernote, soon Hootsuite). Here are a few more.

    Subscription:
    This has been controversial in regards to the New York Times and such. The model has been applied to online training, videos and worksheets and in some cases access to forums. This is currently being used by many online like Dave Navarro (http://www.thelaunchcoach.com/ ) and The Third Tribe (http://thirdtribemarketing.com/ ).

    Website as Engagement/Marketing Platform:
    Many have been using websites and social networks to post information to be helpful and prove their expertise in their field. They then use that platform to drive traffic to their products (digital or physical), services, their business, or affiliate commissions. Chris Brogan (http://www.chrisbrogan.com/ ), Scott Stratten (http://www.un-marketing.com/blog/ ), Dave Navarro and Brian Clark (http://www.copyblogger.com/ ) all do this well.

    Two people that are doing unique things that are not yet proven but I think are great examples of taking risk and generating revenue in new ways.

    Plaid Avenger:
    Using his unique personality and the tools available on the internet (http://plaidavenger.com/ ). To engage his students in new ways. There is a reason his class is the most popular class at Virginia Tech and that his class is larger than many colleges in Southwestern VA (http://www.roanoke.com/news/nrv/wb/176886 ). He sells merchandise on his site and is working to build out the Plaid Avenger Platform.

    Corporate Toons:
    A new webcomic (http://corporate-toons.com/ ) by the artist from the Plaid Avenger. He is selling caricatures (here is mine http://corporate-toons.com/employees/profile/aaron-fooler/ ) at a fraction of the market value that lets users become part of the cartoon (here is the first appearance of my cartoon! (http://corporate-toons.com/comics/meet-max/ ). This brings a bond to the cartoon increasing sharing and giving the artist a huge stream of new characters to choose from, and he also accepts stories that can become strips! He is also selling the originals of both the characters and strips. It is too soon to tell how successful the cartoon will be, but he is approaching the webcomic world in a different way.

    There are proven methods to generate income from websites and an almost limitless number of ways to experiment with generating income streams. I really think the choice is simple. We can cling to methods that are failing or experiment with something new. I know the side I want to be on.

    Disclosure: I have done work for Handshake Media, Inc in the past (posts for Handshake 2.0 and photography, etc.). I am a customer of Dave Navarro. I have worked for Plaid Avenger, LLC (photography). The artist for Corporate-Toons is a friend and I am a customer, all my promotion and assistance with the project has been done for free, without expectation of payment. He recently gave me a free stand up and the original of my character for free as a gift for all the help I have given.

    Bleh that legal stuff was a mouthful.

  5. Comprehensive follow-up, Allen, thank you! I respect your disclosures. Your “bleh” made me laugh. 🙂

    Nice job and thanks again.

  6. I hope it helps. I really like something Gary Vaynerchuk said a few months ago.

    “Now we all have an at-bat.”

    His point being that while the increased ability to connect and build businesses with little start-up capital increases competition that will keep most people from being the next run away success, we all have a chance to throw our hat in the ring and try.

    Even if we don’t end up being the next Gary or Oprah, we can carve out a nice niche to be influential and impact the world.

    If we are willing to put the work in and be creative in our approach.

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