Mark Cuban has a popular post today about informercials and ripoff TV commercials degrading the quality and hurting TV networks. He also points out that his own network HDNet will never take these type of commercials.
He summarizes his thoughts with the following quote:
How about this for a concept: If you haven’t sold a commercial, don’t run a commercial. The lack of a spot will hurt your bottom line far less than running a spot to ripoff your customers.
My question, is does this apply to online advertising as well? Many of the ads on the web out there are of the low quality and ripoff nature described by Cuban. Of course, these things are also pretty subjective. But are publishers and ad networks better off by not accepting these types of ads? They actually tend to perform quite well, it’s clear users respond to them and often end up doing what advertisers hope they do, and so they in turn end up paying publishers more than run of network brand ads.
I think if ad networks and publishers took a stand about 5 years ago maybe these types of ads wouldn’t be so popular on the web. Now that the genie is out of it’s bottle, is there any going back? Informercials are as popular on TV as ever as far as I can tell, most likely because they work for the advertisers and are profitable to the TV stations.
At what point do publishers and ad networks turn down profit in order to just “be higher quality”?
If ad networks followed Cuban’s advice about not doing these types of ads, it would mean that the amount of inventory ad networks filled with publishers would dramatically drop. Making their business smaller, having less staff, and making publishers less money. This chain reaction then causes the publishers to layoff staff and reduce the quality of the actual content and tools they supply for free.
What would happen if publishers followed Cuban’s advice today? They’d have to stop working with most ad networks, leaving a HUGE portion of their inventory unsold. Which means they either make no revenue out of a lot of ad space, or they sell that space for cheaper to quality advertisers which then lowers the general amount they charge. Again, making them less money and causing their businesses to shrink and provide less for free.
Those would be the definite short term results. But would it help everything in the long term for them if they stayed high quality?
There are a couple of ad networks and a select group of publishers who do only take high quality advertising and will choose to have their businesses not be as big to stay high quality. However, I’m not sure it’s clear that these companies make more money from their strategy in the long term or not, but perhaps they sleep better at night?
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