2021 Web Advertising Revenues Demystified

Over the years I’ve explained why it’s imperative to understand advertising revenues in today’s age of the web and social media in particular.

Unlike most that like to give commentary or supply “answers” using what they read in the reporting via the mainstream business/financial media. I have actually had first hand experience developing a campaign with a global purveyor (their brand is instantly recognized), as well as the national agency that represented them in their media buys.

Here’s why the above is important, rather, than some lame attempt to try and do the equivalent of name dropping using a resume backstory for the appearance of credibility as so many others do.

When I was “in the field” as they say. I was only in it for a very brief moment. However, it was in that “moment” that I dared to question all the prior norms and supposed “limitations” for who one could contact and what back-channels had to be adhered to.

Everyone (including my boss) said, what I proposed would never happen. And besides, he already had a “National Agency” representing him in the area of national buys and they had already tried and keep trying but, we were just a droplet in the sea of “big media outlets” we were told. So, forget about “pie in the sky” stuff and focus more on our niche was the tenor and tone.

Of course, I objected. And, the hurdles to overcome were manifold. Yet, I believed, I was correct and was allowed to at least give it the old “college try” as I saw fit. Otherwise, they knew, I wouldn’t drop it. Here’s a bit of what needed to be done…

Not only did I have to sell them (both the global brand and their national media purveyor) on a idea that was never before tried. I simultaneously needed to convince both to allow me the latitude to edit their multi-million $dollar focus grouped, word for word, frame for frame commercials as I saw fit, which in-and-of itself always produced a prerequisite answer of: No. Never.

Yet, I did just that. And, that opened up an avenue of advertising that is still running to this day near 30 years later. Let’s just say, this recurring media buy line item is probably in the 10’s of $millions annually. Year after year, after year, after year…

I say the above not to impress anyone, rather, I’m only trying to impress upon you that I may have a bit more of a general understanding of advertising than others. Nothing more.

Now, with the above for context. I would like to put out the following for your consideration that was prompted via a discussion I had over the weekend with a “social media pro,” as we were discussing what possibilities the broadcast could venture into as to help spread its reach.

[Side bar: And for those of you that are right now shocked that I would even entertain anything social? As I have always said: I will always keep this door open if someone can demonstrate, to me, a real ROI worth perusing. What one should take note of is the fact, for years, I have yet to see one that works for someone with my dilemma. I’ve seen a lot of “Hey, well, we can do this and that and…” Yet, when I question how they can measure “this or that” that’s truly important to measure real ROI, not some reconstituted smoke-and-mirrors bullcr#p I can smell from a mile away? The conversation usually ends right about there. But, I do keep an open mind. So, with that said, as always, we shall see.]

Here’s what transpired that prompted all this. i.e., I received a note from that “social media pro” (paraphrasing)…

“When we were discussing this subject a while back, I kind of brushed it off as not relevant. It just kind of didn’t seem to fit in to what I was hearing reported in the social media space, especially when you add into it Facebook and Google’s latest earnings. Then, I was listening to a guy on YouTube that I follow, who is big in the social media space. And when I heard him make the statement about costs per clicks and more, I immediately thought ‘Holy crap!’ That’s precisely what you were saying to be on the watch for as a first sign that things may not be what they appear. Now it makes so much sense in how you can have more ads or clicks bought, yet, it’s not because there’s new ad buyers coming in. It’s just the same ad dollars buying more ads cheaper! Like you said – ‘If they’re so valuable – why are they being discounted?’ I didn’t fully grasp your point prior, but I see it now. The video link is attached.”

The reason why I’m offering all this up is in direct opposition to what you hear regurgitated via the mainstream business/financial media. All you hear are the “Blow out!” revenue numbers. That’s a very big deal. But, what about context?

The glaring issue no one seems capable of saying is that both Facebook™ and Twitter™ alone lost one million+ U.S. active users – each – over the same period. Again, during “lock-down,” when we’re told the social media space for ads is more relevant than ever because, “everyone’s there!”

That metric (losing U.S. active members) is anathema to that story line.

Remember: The value for potential purchasing power of any product advertising is: U.S. consumer discretionary income centric.

That metric alone can be worth anywhere from 10 to 1, even 50, or 100 to 1 over most others. Said differently: Do you want to advertise to 10 people that have the income to purchase your product? Or, do you want to advertise at a 50% discount to 1000 that do not? Think about that very carefully, because many are taking the latter as “A deal!”

I have been on the CPC (cost per click) metric case for years now. I have argued ad nauseum that if a “click” was going up in usage and is perceived therefore to be “more valuable.” Then why does it need to be discounted, continuously? Business, let alone, advertising doesn’t work that way. Period.

However, far too many think: “What does this guy know? He doesn’t even use it!”

That’s a fair point but, when I’m allowed to answer it, rather, than just being talked over. Many suddenly realize I may understand a bit more than they originally gave me credit for. i.e., I’ve used the example when I would be questioned antagonistically on stage in prior years, that because someone had 100K Twitter followers, that they understood something I did not. Therefore, they’re “crushing it” and I’m just crushed by it.

Yet, when I gave them a real time example, using just one, that when any of my articles were picked up via this news outlet and sent out directly to their 3million+ Twitter followers. Who was using the platform more to their advantage for reach. Them, reaching 100K? Or, me reaching 3million+, with no account?

That was, usually, when the room went silent.

Below is that video I was sent. I’m not that familiar with the interviewee, Mr. Patel, however, from what I can garner, he’s a well respected social media advisor and advertising specialist with quite a resume.

So, rather than take it from me, I urge you to listen to the interview because there are some relevant topics that pertain to the current situation because, this interview is only weeks old – not months or years.

If you don’t want to listen to the entirety, you can just hop to about the 11 minute mark, where he breaks down what is transpiring within the social space in regards to ad buys and its ROI.

If you listened you’ll now understand what I’ve been articulating all these years and why you need to pay attention now more than ever. Because, you not only need to know what metrics to listen to. You also need to understand just what those metrics may imply as everyone else rushes off believing “They know!” when in principle – they understand nothing, which is far more dangerous.

Last item for your consideration…

Google™ also reported “blow-out” earnings. Ads are up and more. But, I ask…

Have you noticed watching anything on YouTube™ has now become a frustrating event of ad interruptions at precisely the wrong moments and almost as many ads a commercial television program? And, now with that for context: How many of you have “clicked out” because of it?

Hint: It may be good for Google’s bottom line, now. But, what happens when those paying for all those “new impression opportunities” (or, were offered them for free if they didn’t reduce their prior ad buy) find they didn’t produce any ROI worth continuing to begin with. e.g., No one they advertised to bought anything.

Think they’ll continue? Think they can?

Think about it.

© 2021 Mark St.Cyr

Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.