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While online advertising has become a standard component of everyday internet use, it was not always such. Early internet activity was limited to networks that were essentially predecessors to what we know today. ARPANET and NSFNET from the 70s and 80s prohibited for-profit organizations from using their technology for commercial activities. Instead, such providers primarily intended to offer access to remote computers and promote advanced research and education networking.
By the mid-1990s, the first type of online advertising began to take shape in the form of banner ads. Access to the internet was becoming increasingly common, and brands were beginning to discover new ways to reach audiences. Naturally, businesses dedicated more resources to their digital footprint as internet usage became more prevalent. As eCommerce sites and company webpages became the norm, businesses needed new ways to monetize these platforms.
The Evolution of Advertising Placements
The early days of online advertising
Enter HotWired, an offshoot of Wired and the first-ever commercial online magazine. To increase revenue opportunities, they dedicated portions of their website to advertising space, charging brands a fixed cost to advertise on their site for a set period. For an upfront fee of $30,000, the American multinational telecommunications company AT&T placed its banner ad on the HotWired website for three months. The result was an astonishing 44% click-through rate. Fast forward over 20 years later, and average click-through rates now stand at 0.35%, so what changed?
As the rest of the world began to take note, banner ads soon exploded in popularity. Website owners could now keep their content free while still receiving an income from advertising revenue. Over time, more businesses began to see the value of monetizing their site inventory for advertising purposes.
However, user sentiment surrounding online advertising has greatly diminished in recent years. Modern internet users are tech-savvy and wary of advertisers and personal data holders. This means they are less inclined to click a banner ad. Indeed, many feel that advertising is simply an obtrusive annoyance that must be circumnavigated daily, yet do not consider how advertising facilitates access to the free and open internet.
Placed with a purpose
The internet as we know it today could not exist without digital advertising. It is a treasure trove of free content accessible anytime and almost anywhere. It has become so accessible and ingrained into daily life that many forget to think of those behind the content. Behind every piece of content is the creator or business that needs to finance production and compensate themselves and their employees.
Picture the scene: you are browsing the net when you come across an eye-catching headline for an article. You click the link, but before you can begin reading, a pop-up invites you to sign up for a paid subscription. This can be difficult to justify, particularly when you don’t yet know how valuable the content is to you. Although publishers and site owners know this, the barrier of entry is much higher when money is on the line. That doesn’t mean that subscription and paywall models are obsolete, but rather they are strengthened by an existing loyal user base.
The user sentiment
For most people, paywalls elicit a knee-jerk reaction to press that return button and may even cause some reputational damage. Online advertising is, therefore, the most sustainable model of online monetization when the format is well-integrated and doesn’t compromise the user experience.
Much is said about online advertising getting in the way while browsing the net, but one might argue that a paywall is even more obtrusive. The fact remains that digital advertising is going nowhere and will remain the most reliable method of keeping content ungated and accessible to all.
Additionally, new advancements in cookieless and ID-less technology mean advertising is becoming more user-friendly and respectful of user privacy. Ogury Personified Advertising Engine offers cookieless advertising experiences that deliver the best performance on the market, without compromising the user experience.
Learn more about how Ogury has prepared itself for a cookieless future here:
- The attention misconception
- Chrome, Apple, Cookies, and Delays
- Personalized vs. Personified advertising
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