Online advertising seems to be big business these days. In fact, it seems to be growing every month. But to be honest, I’m having a hard time believing it will last. Why, you ask?

Well for starters, all those websites that are running ads, and companies like Yahoo and Google aren’t making any money because of me. I have an ad blocker installed, so when I visit websites, I don’t see many ads to begin with. Why do I have an ad blocker installed? It’s quite simple, I grew tired of all the annoying ads and popups just like most people on the Internet. I also grew tired of large (flash) ads sucking up my bandwidth. I also grew tired of those overlaid ads on some websites. It’s gotten so bad that I have managed to develop special ad-reflexes. It’s a whole new kind of adsense, if you will. It’s gotten embedded in my sub conscience. For example, as soon as my mind detects a browser window popping up without my consent, I automatically click the close button of that window in approximately 0.3 seconds, so before something even gets the chance to be downloaded and displayed in that window. It happens so automatically that it doesn’t even cause me to loose much attention and focus on what I was reading or looking at.
The same thing happens when I get one of those annoying overlaid ads on some webpages. Instead of paying any attention to the contents of the ad, I just find myself looking for a way to remove it as fast as possible, usually by clicking on a small X on the top right corner, so I can proceed to view the website and the actual content I came to view in the first place. And the same thing also goes for those websites which bring you to an ad-page first, before taking you to the actual content.

The ad blocker doesn’t always remove every ad on a website. So after I first view a website, and the more I visit that website, my mind develops a general idea of where the ads are located inside the layout of the webpage, and it’s like I never see them anymore. I just don’t notice them, my mind just filters them out and it’s like I just see the content I came to view. The same thing happens with those websites that display the Google text ads. I just don’t pay any attention to them. As soon as my mind recognizes a pattern that resembles a Google text ad, it just gets filtered out of the content and becomes invisible. The same can be said about the “Sponsored Links” ads on the right of an email when using Gmail. I just don?t notice them anymore. Does anyone even read those text ads? Honestly? I can’t remember the last time I read one of those, let alone remember the last time I actually clicked an ad.

When I visit a website, I visit with a purpose. I don’t visit to view ads, I visit to view the content. And I value my time a lot, so I don’t plan on spending too much time on that website, certainly not reading ads.
Do all of those companies who’re paying for online advertising realize this? Am I the only one like this? Do those companies realize that online advertising may not be as effective as they think? Google can have some of the best ad technology, but all that technology is certainly lost on me.

I think the primary reason right now why online advertising seems to work, is that there are still a lot of newbies on the Internet. For many people the Internet is still relatively new. These people are inexperienced and are just beginning to experience the online world. When they visit a website, they spend much more time looking around trying not to miss anything. They can also easily get tricked into clicking on an ad. I’ve seen this by simply watching my dad browse the Internet. These are the people who will click on those annoying shoot the duck or punch the monkey ads. A typical session:

“Hey, look at this. Punch the monkey and win a prize!”

*clickety* *clickety* *clickety* *click*

“I did it!!”

New page opens, 3 popup windows open, adware installs on the background.

“Hey what’s this?”

Not that this happens with my dad, but it’s a very real scenario. I also can still remember the day when I gave my younger brother access to the internet and he started to get all kinds of spam promising him free stuff with links to all kinds of websites which he probably was more than happy to visit and fill out some forms. I can remember the day he insisted that he really won a camera and that it would be arriving in the mail any day now. After some serious questioning and investigation that would put even the CIA to shame, I found out that he saw this ad on some website which asked him if he wanted a free camera, which ofcourse he did, and took him to another site so he could fill in his address and related info. What was amazing is that he refused to believe me and thought I was the one who was crazy. I think he got a little wiser now after spending some more time on the Internet and learning the ways of the net.

In the same way there are millions of new people on the Internet these days, and I think they are the ones more likely to read and click on ads, justifying the online advertising business. Why do people insist on sending spam? You and I don’t read them, we don’t even view them most of the time. But there are millions of curious new users who actually read spam and click on the links in those emails.

As time passes and more and more people get the general idea about the Internet, I think online advertising will become less effective. People will get used to the ads and won’t really notice them anymore. Those Google text ads are on so many websites I don’t even notice or pay attention to them anymore. And as soon as the ads get annoying to catch my attention, I’ll just install an ad blocker or something. It’s what happens with every new user on the Internet. There is a reason why Tivo became such a success.

I guess the question that remains is: Will the amount of new users on the Internet remain constant, grow or shrink as time passes? And when I say “new user”, I mean new in the sense that they are relatively new to the concept of ads on websites, still curious and innocent enough to read and click on these ads. My guess is that it will still grow for a few years, but slower as time passes, and while the existing users become more experienced with the Internet, the number of ad click-throughs will drop. And advertisers will probably start noticing that advertising online is becoming less effective. And as a result, companies like Google are going to have to look for new ways to keep their clients advertising. Considering my own behavior and experience with regards to dealing with ads on websites, I seriously doubt the effectiveness of online advertising myself.

Yet, it still seems to be big business, and companies like Google and Yahoo keep attracting more and more investors to finance building free ad-supported services. And everything they do seems to get praises from everyone, even if it?s mediocre at best. Seems like an obvious case of “The emperor?s new clothes”, if you ask me.

Companies who are jumping on the ad-supported software and services bandwagon these days, as Microsoft seems to be doing, should carefully consider this. In the long term it may prove to be the wrong kind of investment, that is, if your intentions are to really make enough money from it, to support those products and services.