ROI

This Study Shows Publishers Actually Lose Money Running Bad Ads

A friend shares a great article with you. Intrigued by the headline, you click, excited to read something smart, pithy, nuanced. But then something happens—you’re bombarded by ads. Perhaps it’s a small sidebar video that automatically plays with sound, maybe a blinking neon sign that floats around the browser taunting you. How rude, right? So rude, in fact, that it makes you want to close the tab before you reach the second sentence of the actual article.

For anyone who regularly reads the internet, this pattern is far too common. Users are expected to dodge ads just to get the content they want to read or watch. Publishers probably hate it, too, but they have to serve the ads. It’s supposed to be the cost of doing business.

But according to a new study published in the Journal of Marketing Research, such intrusive advertising may actually be bad for business.

Titled “The Economic and Cognitive Costs of Annoying Display Advertisements,” the research was worked on by a five-man team, headed by Daniel G. Goldstein, a principal researcher for Microsoft. The team set out to determine the real costs publishers and users face from low-quality ads. Using a mouse-tracking method, they concluded: “In plausible scenarios, the practice of running annoying ads can cost more money than it earns.”

The researchers determined that annoying ads cost publications $1.53 per 1,000 impressions. And since estimates put the average CPM for display ads on publisher sites at about $3.00, a sizable chunk of which goes to the ad networks that serve them, it only takes some basic subtraction to realize that plenty of sites may actually be dragging themselves deeper into the red.

This information should dissuade publishers from taking on every banner ad or pop-up just to chase what was presumably thought to be short-term revenue. The fit and quality of these ads matter. Simply running a crappy ad could very easily alienate users, stymy traffic, and irreparably damage the publisher’s image.

Many users have already made it clear they’re fed up with the deluge of digital ads stuffing every webpage. Ad blockers have ballooned into the mainstream—over 40 percent of millennials have one installed—cutting deeper into already waning revenue streams.

The next time a media company tries to justify its addiction to display advertising, remember: It’s in the interest of all publications to use ads responsibly, not obnoxiously.

Image by Getty
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