The impending (but slow) death of the banner ad

Two nice thoughts from this rather good bit by Felix Salmon:

“So one of the big reasons why online advertising has done so well is simply the negative one: online micropayments were a disaster, and never took off. But they’re much more compelling as a business model, and there’s a decent chance that at some point in the future the financial system as a whole is going to get its act together and put together something which actually works and which people are happy to adopt.”

This is an interesting stance to take given paywalls are still unproven (and in fact the Fin Review almost halved it’s paywall price yesterday). But I don’t think he’s too far off the mark, it’s just the timing of it all wil be slower than a lot of people (and publishers) assume. Once we get used to contactless payment in the real world via NFC, I think we’ll start to get used to the same sort of fast and invisible payments online. But this won’t be for mainstream news on the desktop – it will be for content or information people need and want immediately on their mobile. This is already happening with Angry Birds levels. Once we change this fundamental payment heuristic, we’ll see a big change in how we experience the internet. Display ads will (hopefully) fade away, but advertising certainly won’t disappear.

“It’s the measurement fallacy: people tend to think that what they can measure is what they want, just because they can measure it. And it’s endemic in the online advertising industry. In fact, with very few exceptions, I’ve never even wanted to look at online ads: its quite astonishing, the degree to which we’ve collectively trained ourselves to ignore ads when we bring up a web page. And what that says to me is that online advertising is missing something really huge.”

Nothing to add to this. He’s dead right.

- December 2011