Ads the New Online Tip Jar? Maybe in Small Quantities

I’m a big fan of Seth Godin, but his latest blog post, Ads are the new online tip jar, seems a bit shortsighted to me.  Seth argues that to support their favorite blogs readers should click on an ad to provide some small financial support to the blogger.  Taken to its logical conclusion, however, this strategy will only harm bloggers and other content providers in the long term.

Unlike advertising in traditional media, it is easy to quantify the value of any online ads.  If legions of blog readers were to start clicking ads to “show support”, advertisers would soon adjust the CPM rates they are willing to pay or, perhaps worse from the blogger’s point of view, move to a click-per-action model.  Suddenly, even legitimate ad clicks would net bloggers almost nothing.

In fact, with networks like AdSense which are essentially data mining and optimization machines, it’s not crazy to think that a click-to-support strategy would would begin devaluing clicks from the blogger’s site right away.  In that case, even hinting that readers should click ads to support the blog will begin eroding CPM.

Coincidentally, Matt’s post from yesterday (Clickthroughs per Purchase is the Gold Standard for Targeted Email) addresses a similar issue, but from the advertisers side.  How much is a click worth of the clicker is just window shopping or clicked for the “wrong” reasons?  Not much, and in the case of online ads, the value is clearly negative.

So for now, I recommend bloggers keep the tip jar.  Leave the ad clicks for readers who are genuinely interested in the message.

Tags: CPM, Data Mining, Online Advertising

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This entry was posted on Friday, August 22nd, 2008 at 7:41 am and is filed under Data Mining, Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.