TechStuff Classic: TechStuff Clicks on Web Ads

episode of text Stuff. This episode, originally published on June twenty, two thousand twelve, awful close to my birthday, is called tech Stuff Clicks on Web Ads, And as the name suggests, Chris Pallette and I sit down to talk about web advertising and how web advertising works and the whole revenue model behind it. So I hope you enjoy this episode. You like stuff on the web, right? Yeah? I mean,

you know, both of our careers depend heavily, uh. In fact, I would say entirely upon upon putting stuff up on the web. And the reason why we're able to do that is because we can make money by putting stuff up on the web. Yes. And the reason why we were able to make money putting stuff up on the web stems mainly from advertising, yes, And so we wanted to talk today a little bit about web advertising. We've covered the subject a little bit in previous episodes, but

we really wanted to kind of dive into it. And advertising has a bad rap, and part of that is because advertisers have sometimes used very invasive, intrusive or manipulative approaches to try and get ads in front of you. Yes, and I'd like to point out that this episode is brought to you by Chocolate Nibbles now with nine essential vitamins and minerals. Yes, we got rid of that other non essential vitamin and mineral. Yes, just it was looking

at us funny and we didn't like its face. But now, yeah, we're talking about web advertising and there's good points to it and bad points to it. Now, the good points are that without web advertising, you'd have to find some other way to make money putting content up on the web, or else people wouldn't do it, or at least not as many people would do it, and certainly not you wouldn't see the same level of quality across the web.

There there'd be, you know, occasionally, there'd be someone who would be amazingly talented, who for altruistic reasons, wants to share what he or she has come up with on the web. And those people will be amazing and their content they create would be phenomenal, and it would all be done, you know, the effort and the time being put in would all be that one person's resources, and that would be fantastic. Chances are it wouldn't be their day job though, because they wouldn't be since you weren't

making money off of it. They've got to eat somehow, so they would probably be doing something else for forty hours a week. And then you think about all the sites you regularly go to, a lot of those sites are supported through advertising, and so without the ads, those sitestone exists, which means that content that we have grown so fond of accessing would no longer be there. So in that case, advertising plays a very important role. Now, of course, you can you can make money with online

through other ways besides advertising. You could have a subscription based service where people have to pay a certain amount per unit of time, usually be monthly, but it might be you know, six months or a year or whatever.

You can't even do it smaller units if you really wanted to um and make money that way by saying, all right, well, you can access the content we create on this site if you pay this amount of money per this unit of time or or per article some, Um, some sites do that, you know where you have Hey, if you want to read this article, then it will be to to read this one particular story, right. And the thing is that the way the web has developed over time, people have grown to expect free access us

to something if it's on the web. Yeah, it's a cultural thing. Yeah. The early days of the Internet, I mean that the people who were doing this were government institutions in the United States and higher learning you know, colleges and university so the the content online was specifically for those groups and the commercial entities really weren't involved in it in the early days. So the people who were doing that or or actually you know, some of

it is from the online services UM. So if you had a modem, you could dial up to a bulletin board and you may not have to pay a fee, and you would join the community there and swap stories or you know whatever it is that they talked about. UM. But they didn't they might pay a fee, a subscription fee to join the BBS or for internet access in the early days of the Internet as a commercial sense, UM,

but they wouldn't be paying for the content. And so the idea came about that web advertising could potentially be far more effective than traditional forms of advertising. That was the initial thought, and the reason for that was that if you buy an ad in a magazine, or you put on a billboard, or you put in a television show, it's a in the ad breaks you have a reasonable expectation of a certain number of people that ad is

going to, UH is going to connect with. Now, whether those people are paying attention to the ad, you don't know whether if whether or not they pay attention to the ad and then go forward and actually act based upon what they saw in the ad. You don't know that either, but you you what you do know is that a certain number of people, based upon the market research,

are going to see that particular ad. Actually, this seems like a good time to bring up a point that there are two major types of advertising we're talking about here too. Um. Direct response is the type of advertising debt does encourage you to do something like if you were going to UH listen to the podcast and suddenly now you're craving a bowl of chocolate nibbles and let me tell you they are delicious. Um, now we got rid of the non essential vitamin mineral. Yes, you should

run out and buy something. That's the point of an advertisement like that. UM. Then you have what they call branding, which is basically, you know, hey, you don't have to go run out and buy our product. Just think of us the next time you're doing something like that. And that's the kind of thing that you see like at um uh sporting events. UH. For example, the ads on the sides of hockey boards or on on the sides of race cars. They don't say by you know, such

and such product. They're just showing you the brand name, so that you sort of think about them and you're you're thinking, oh, well, you know, I like these guys. They sponsor my favorite driver. Yeah. The idea might be to get that brand name in your mind so that the next time you go out to get something, you actually think about that particular brand. For example, you might think, hey,

I'm thirsty, I would like a soda. I just saw that ad for coke, and maybe I wouldn't normally get a coke, but that sounds good to me right now,

I'll go ahead and get a coke. UM. So it's it's one of those things where getting the brand out there is really important, and marketers will tell you how important that is that you know, you don't want to mess with your brand, You don't want to change your brand identity to drastically unless you do it in the right way so that you make it a sort of a public event where people will make that transition with you, because it's you know, this is stuff that's sticky in

people's minds. Yeah, there are people who are going to walk into the store and they're going to see that brand name that they know so well, um, and they're going to choose a product from that manufacturer simply because they know the name. They might see it next to something else that they've never heard of and go, well, at least I know who these people are. So that's

just basic advertising. Now, if you're talking about the web, the the the advantage, or at least the apparent advantage back in the early days, was that you could actually monitor what people were doing based upon the webs you were, the the ads you were serving up on the web. Brother, So let's say that you go and you put an ad on a really heavily traffic site in the early days of the Internet, so Yahoo. Let's say, um, you

put an ad up on Yahoo. Well, you already know that a certain number of users and the millions perhaps visits Yahoo each day, so you know that that that's how many people are going to see your ad, and and the websites track their statistics so that they can report back to advertisers. Hey, if you advertise with us, you will reach at least two million people. Right, this is how many This is how many unique visitors you will see. Yes, this is how many people actually have

page views. Because the two things are different. Yes, we talk about that in a minute. Yeah, so at any rate, because the early days of the web advertising, they were thinking, why is this any different from say a magazine Apart from the fact that we can actually give you more data about the people who are taking a look at this ad, um, it should be the same price, and in the beginning it was. But here's the Here a

couple of problems. One is that it also let you know when people were not uh reacting to an ad,

at least not actively reacting to an ad. So, in other words, if no one's clicking on the ad, or if it's a really really really small number of people who are clicking on the ad, then you question was the value of that ad right, Because if no one's going converting over and clicking through, then the advertisers say, well, why are we spending the same amount of money we would for a magazine ad or a television ad if

this if only these few people are clicking through. Never mind the fact that we can't be sure how many people see the magazine add or television ad and react to it, that doesn't matter. They're saying, well, we have a proof here that not that many people are clicking through, so therefore this is overvalued. That was one problem. The other problem was that lots of websites were popping up. That meant there was a lot of landscape for advertising.

So with lots and lots of websites of various degrees of popularity popping up on the web, that devalued web advertising. It's like a supply and demand thing. So, for example, imagine that you have a stretch of highway and there are three billboard signs up, and they're only three, and those three are would be a certain value to be able to advertise on them, because that that's the only three that any drivers are going to see. Well, then let's say fifteen new billboards pop up along that same

stretch of highway. Well, that's just devalued the the value of the three that already existed there. Yea. And that can actually happen on a site too. It's not just across the the web. If you put up so many ads that uh, it sort of drowns out the content. People begin to tune them out, and your your message loses its power. So it's a very delicate balancing act is figuring out where the place ads, what sort of ads you use, how many do you have per page?

And it's not just a balancing act of turning off readers or turning off visitors from going to your site. It's also a question of how much money does it cost to run your business and how can you offset that through advertising? If that's your chief way of generating revenue. You have to find that balance. And it's tricky because you know, you, if you're talking about the ads themselves

are being devalued the more they're out there. Then you have to balance that out, like how do you take advantage of advertising in such a way that you're actually making enough money to sustain whatever your business you're in, right, and uh, and it's not easy to do well. And it it's worth pointing out I think too that um, to some degree, the web is a fairly inexpensive place to do business. Buying a domain name, arranging hosting for a year, um, you know, that's that's not terribly expensive.

You start getting into, uh, some cost problems when you generate a lot of traffic to the site, because in a lot of cases, say, if you you're just a person who wants to start a blog just for the sake of starting a blog, and you promote it to your friends on Facebook, and you get a couple of gigabytes worth of bandwidth per month, that's probably not going to and that's a lot of traffic just you know, for for a person with a blog who's just having fun with it. Um, you know, you might decide to

stick some ads up there. But and and that may very well offset the cost because you're web hosting provider. A lot of them these days don't charge uh for a certain amount of traffic. Now, if you're somebody like a magazine or streaming media side or something like that, that's going to generate tons and tons of traffic, and the web hosting provider is gonna say, hey, look, pal, you know, if you're taking up room on our servers, you want yeah, if you want the band with, you

gotta pay. Yeah, So know, you have to pay people to run the side and maintain the side. If you're a magazine, you want to pay writers, maybe freelancers, editors. You know, you're gonna have a lot of people working there, so you have to pay for them too, and then you have to generate more revenue to offset that. So it's it's relatively inexpensive to get in, but depending on the scale of the operation, you might need serious money

to keep it going right. And you know, we when we talked with Bernie Burns of Rooster Teeth, Yeah, you know he talked about back in the early days of Rooster Teeth, that was before streaming video was a thing on the web. So what people would do is they would actually download an episode of Red Versus Blue, Right, So they're downloading video files. And because it became so popular so quickly, that meant that they were having some pretty massive bandwidth issues and so that that sort of

thing can come into play. And yeah, like I said, it's it's one of those things where you've got to figure out, well, we have to make a certain amount of money just to sustain our businesses. And then in order to be a successful business, you have to actually a money. So you have to determine what kind of ads you use and how much how many of them you use. So now, back back in those early days when I was talking about UM, the the days like when Yahoo was selling ads at around the same rate

as what you would get for a magazine ad. That was about around sometimes thirty dollars per one thousand clicks or one thousand um impressions actually, and impressions and clicks are two different things. Impressions essentially means that if a thousand people visit that that particular website and that one ad is on that website, then the average advertiser would pay the website thirty bucks for every thousand. Well, yeah, he's just that that is not a standard necessarily a

standard rate he's just using. Yes, that that was back in the early days, just web thirty, sometimes more than thirty dollars per one thousand. But as time has gone on that that price has been seriously cut down. And it all depends on what kind of website you run too. If you're running a website that's incredibly popular, then you can command higher prices than you can than a smaller

website can. But in general you're now talking about a few cents per one thousand visitors if it's a uh CPM model, And we'll talk about that in a second. But before we before we get into the various models, I wanted to talk about the different formats that you find in web advertising. Yeah, probably the most popular in those early days was the banner at the banner adea.

These were the ones that ran along the top of the ad of the site, sometimes along the bottom, and if it was along the side, we called them sidebars as opposed to banner ads, but the same sort of thing. It's a a long, narrow band that would have an add on it for for some product or service. Usually it was a link, so that if you clicked on the banner, you would go to the website of said product or service. And uh, it was the way to

advertise on the web for a really long time. UM. But again, because it's a link, it's one of those things that can be monitored and in fact, if it's a link that's coming into a company's website, they may not even need the advertising. UM. The They may not need another agency to tell them anything about the traffic, they might be able to see it on their own.

But if they see that the traffic just hasn't increased significantly, or that, uh, that traffic from that ad hasn't really picked up, and that they're not really seeing a conversion into sales, then that's going to really cut down on like, why would anyone bother buying an AD if it's not working. So those were some of the earliest ones, and they're also some of the ones that are easiest for users

to ignore. In fact, there's you know we talked about in the business, it's called ad blindness, where you just you just don't even register it anymore. You're used to ignoring anything that falls in certain quadrants on a website because that's where everyone puts their ads, and you just don't even notice it anymore because you're just looking for

the content. Well, advertisers hate that because it negates the whole ad and you know, people are spending time and money to develop these ads, and and again they're not necessarily being evil. They're trying to reach an audience so that they can sell their products or services. Some of those products and services may be amazing, but it doesn't change the fact that people have gotten really good at

ignoring those ads. So there's other kinds as well. Uh, there's the floating ads which float across your screen and you have to Yeah, I'm not a big fan of them either, but again they are hard. They they're they're impossible to ignore because they float right in front of your screen and until you close them or click on them, there they stay there. And the cousins of the pop up ad, right, pop up and pop under ads are similar. Now pop up ads become their own it's their own

window that pops on top of the browser. And those were popular for a while. In fact, I remember back when you would hit certain sites like uh like like there were a few sites that I went to there were like a movie rumor sites, right because I was

just interested in what was coming up in movies. And some of them would work with advertising agencies that did pop up ads, and you would get one pop up ad and as soon as you go to close that, two more pop up ads would pop up, and then you suddenly you've got you know, five or six pop up beds covering up your the content you were trying to read and then eventually you just say, why am I even bothering going to the site? I'm going to find some other place to go rather than deal with

this frustration. Pop under ads are similar, except that the new window pops up under your browser, so that until you close your browser, you may not even be aware that it's there. Yeah, and some some sites used to track the length of time that the ad appeared on the screen. So let's say there's a pop under ad and it's been up and you don't even know it.

So they're the site is getting to say, hey, you know so, and so we we actually have a a great rate of people having this up on their screen because there are some people here who have it up for hours and hours. Of course, if they're of course they can't see it. And of course if if not that many people are clicking on the ad, then that that's not as powerful story, right, Like, yeah, they have it up for hours, but no one actually ever bothers to click on the ad, then that falls apart. Now,

see that's just in the details. And and one of the things that has made these ads less common, uh is the functionality and virtually every browser that I've seen in the last three or four years that has the pop up blocker enabled in the preferences so that you can go in turn it off before you you know, the first thing you do is you you go into the preferences and start setting it to the way you

want it to work. And one of the first things I do is turn off the pop up ad, you know, and and they just completely prevent it from opening, right. And then there's some sites that use pop ups for legitimate well advertising is legitimate, but there's some sites that use it for purposes that like interact exactly, so like

filling out a form. So in those cases you have to just you have to disable the pop up blocker, maybe just for that one site, but yeah, I mean that that's the things that these pop up ads and pop under ads are intrusive enough so that users really don't like them. The floating floating adds in a way can be too. They're not quite as bad in my opinion, um, but they also can be irritating if you're just trying to get to certain content. The floating adds, though, don't

irritate me the way peel or expanding ads do. These are the ones where if your cursor floats over the ad, it suddenly takes up half your screen space or more, it will unroll. And we've we're just gonna be completely blunt here, all right. So, so the company we work for, how stuff Works dot com and as part of Discovery Communication, part Discovery Communications makes revenue through advertising m other things. Yes, and so we have had these these peel ads, these

expanding ads on our site. Uh and I think, um, I think I'm safe to say I'm not the only one who found it frustrating when I would visit my own site and try to find a particular article only to have an uh an ad cover up half the page. While a lot of these things, too were trials to see, uh, how well the public would get into it. So not only do you want to find out, hey, are people looking at these? Are people clicking through to see what's

on the other side of these? And how many people uh stop coming because what they you know, because when they say, you know, hey, I don't like these pop up ads, I don't like these pop up ads. I don't like these peel ads, they may stop coming to the site. As Jonathan was pointing out, and if if the the site that is running advertising notices this as a trend. They'll say, hey, you know what, this is

working to the point where it's not working. Yeah, yeah, And people are seeing these and they don't like them and are leaving. Right. The goal of the advertiser is to get that ad in front of your your eyes and to have you act in some way on that ad in a in a positive way. As far as the advertiser is concerned. You don't want to turn off your potential buyers, right, So they're not trying to alienate the audience. That's not the that's not the goal at all.

In fact, that's completely antithetical to their goals. So that you know, there are times where you'll see certain ads kind of fade away from popularity because advertisers have learned like this has such a negative impact on the user experience that that there that any benefit of getting that name out into the world is negated by how they are are associating that ad with their experience. So some of these ads you just don't even see that frequently anymore.

There are other kinds as well, their wallpaper ads, where it will change the background of a website to to be a certain uh wallpaper, Like I've seen that for for movies, gaming times to gaming, so it's also I mean I've even seen it for things like, um like snack foods where you'll see like along the background, it'll be snacks instead of whatever the normal background would be.

There their ads that can be inserted into text, so they you'll see in the content that certain words are highlighted, and it may be that those words like if you're like, oh wow, that is kind of cool, and you click on it and it goes to the uh to a site that sells something that falls into the category of whatever the text was, so it's kind of a type

of contextual ad. And also there's the video ads, the ones that were made famous by Uncast, where you would go to a site and there'd be a little video ad running, usually in one of the rails, so like off to the right or something, and it would have full video and full sound, which could be very uh, very jarring if you are like me often listening to music on your headphones over your computer and you visit a website and then you suddenly hear someone talking to

you and you're like, someone, what's what's going on? And you start looking around there there's no one around me. And uh, most of the ones I've seen recently that do that leave the sound off until you noticed the video is playing, and then some people will turn the video on the sound on, and some people won't. Um. Something that I just thought of that's sort of unusual. Um the music station Pandora will do. They'll do advertisement deals with companies and they'll build a special music station

around the product that they're trying to do. Um. Yeah. Spotify does the same thing. Yeah yeah, which is kind of a unique thing because they'll do the wallpaper type thing too, but they'll also do uh something that other sites can't, which will have, you know, a special tie

into the type of site. Um that that it works with. Guys, it's Jonathan from the Future interrupting this classic episode about web advertising so that we can listen to some advertising that helps support the We'll be back after this quick break. Formats that ads can take, and there are other ones as well. There's more than what we just covered, but those are the basic ones. There are different approaches. These ads can take two and you alluded to one of them,

and one of them is being contextual or targeted. Yes, and when you're talking about a contextual or targeted AD, you're talking about designing the ad so that it will like using ads that will appeal to the same audience space as the ones that are there to consume whatever

content is on that site. So, for example, if I were to go to how stuff works dot com and I'm looking at how GPS systems work or GPS works, would say GPS systems because I would want to go to my A t M machine and use my PIN number.

But if you went to UH, if you went to that and then there was an AD about a particular vendor that sells GPS units, then you'd be more likely the thought processes, you'd be more likely to click on that because you're already interested in the topic, as opposed to going to an article about how GPS units work and seeing an AD for I don't know, um, a gelatin dessert. Yeah, those two things don't really connect to

one another, although there's always room for it. There's no there's no I wasn't using the brand name and then I go and user slogan, but the the Yeah, that's the that's an example. You know you wanted the contextual or targeted ads tend to have a higher degree of engagement, meaning that more people click on it than ones that have no connection to whatever the content is for the

site that is in question. So one of the things that makes web advertising so appealing for advertisers is their ability to target uh this to their customers, as you were saying. And they can't do that with other media because they would need to do a serve. They would actually have to find out, hey, how how did you hear about us? With the web, they use cookies, which are little pieces of text that are downloaded to your

computer and uh written to and they'll go okay. So, uh, you know, Steve visited how stuff Works dot com and he also visited uh CNN, and he also visited his local papers website, and so apparently he likes reading uh stories about what's going on. He's intellectually curious. Um, so we're gonna you know, he's interested in animals because we know he visited the Animals channel and how stuff Works dot com and read a story about a rescue dog

in his local paper. So we're gonna send him and add about dog food and maybe he has a dog or maybe as a cat. We'll try a cat cat food ad on the next page. And so, if you've ever looked at a website and seen an ad targeted to you in your specifical something that you typically buy or are orientist, or are interested in, and it says, hey, um, if you're in the Dallas area and looking to buy something something, you can wait a minute, How in the world did they know I was in Dallas. Well, they're

using these cookies on your computer to gather information about you. Um. Some people see it as a major privacy, privacy issue because it has information about you and they're looking at that. I would say that, yes, it's a privacy issue, but in general, they don't really want to know what kind of underwhere you prefer, and where you live. They don't even care what your name is. They really just they

just think of you as potential customer. Yeah, and so this is to convert you from potential customer to actual customer. And yeah, that's a good, good progression. Because I was talking about the general ads, the contextual or targeted ads, and then personalized ads, which is what Chris's time all right here, where it's personalized based upon your experience. And there's some companies that do this better than others. Um, there's some companies that are much better at gathering information

about you. It's ample Facebook. Yes, Facebook doesn't even have to bother gathering information about you because you give Facebook the information about you every time you use it. This is what makes Facebook such a valuable company. People not only opt in um to their advertising by being there, they're also providing them all sorts of context for themselves. You know, I like these bands, I like watching these

movies and reading these books. I've noticed on my Facebook page when I go there, I noticed that the ads often seemed to mirror some of the stuff that's been posted on my in my news feed. So I'm reading the reading stories or whatever, and I look clients over at the advertising and like, that's kind of clever that they actually, you know, that they've taken the context of what was posted and managed to pull an ad that related,

sometimes extremely tangentially to whatever the content was. It's also a little creepy, but anyway, that's Those are the three general role approaches. The general general advertising, where it doesn't have anything necessarily to do with whatever the content is. The contextual one, where it does have to relate to whatever the content the site is and then the personalized one, which relates more to the actual user than necessarily even

the content. The early days of web advertising UM sort of looked like it was going the whole concept was going to be sort of a dud because at first it looked like, uh, it just didn't reach people in the way that advertisers were used to. They were used to the the old style of media. They couldn't figure

out exactly the best approach. They couldn't figure out the size or the placement on the page that they wanted to use, and it looked like it was going to be more of a branding than a direct response target. And then, you know, once cookies, once they figured out how to use cookies to their advantage, they were able

to do more targeted and more personalized advertising. And now it's become uh, you know, a multi multi billion dollar business and that the you know, this is what has helped UH companies like Yahoo, Facebook, Google and others to grow as as much as they have is because they're able to target advertising so precisely UM, you know, and use it in different places like Google makes Gmail free because it's able to advertise alongside UM and and we've

you know, taken advantage of that. But because so many places offer us free services that are supported by advertising, so it's it's sort of a trade off that we make, um, providing this information in exchange for free web services. So let's talk a little bit about how these ads actually generate money. And there are various strategies that advertisers use.

One is called CPM, which is a cost per mille or thousand, yes not a million for my fellow Americans who would possibly think such a thing, but cost per thousand impressions, and an impression is a essentially you're looking at it. Yeah, there's a there's a there's a set of eyes that are on that that website. Um, so for every one thousand times someone views that website, uh, the average advertiser would would give a certain amount of

money to the site itself. And again it's probably on a the order of a few cents, so let's say a nickel. So every time, uh, that counter hits one thousand for that site, the advertiser gives a nickel over

to the site. So you have to get lots and lots and lots of eyes on that site for it to actually be worthwhile for the website, you know, so they get that's the idea is that it gives an incentive to the website to create really awesome content that's going to pull lots of people there, and in web terms, that's called sticky. You want people to go there and

stay there. Yeah. Yeah, if if people just go and then and then bail, well then once the advertiser starts looking at the figures, they're gonna say, well, this person was here so briefly that they probably didn't even see my ad So there's no point in paying you a higher amount of money per thousand eyeballs when or pairs of eyeballs when when people aren't even bothering looking at stuff. So yeah, it's it's more than just the fact that

a thousand people got there. And sometimes this gets knocked down to um a CPV, which is a click per visitor, which again is different than an impression, because an impression could be that you go to a website, you click to a different page on the website, you go back to the home page. Well, your two visits to that homepage may each count as an impression, even though it's the same person looking at it. You have seen that same page twice, so you've seen the same ad twice.

A CPM maybe UH may count both of those visits. A CPV is to different. That's count. That's clicks per or sorry, not clicks, but cost per visitor. So the idea being that every unique visitor counts towards that AD. But if you were to keep refreshing the page or click around and keep coming back to that homepage, those additional visits would not count. It's only the unique visitor that counts, and usually that's on a per day basis,

so for every twenty four hours. So if you came back to that page the next day, sure it would count then, but it doesn't count during your visit when you're at that page um or that website. I should say, Chris and I have a bit more to say about web ads, but before we get into the final segment, let's take another quick break to thank our sponsor. Then

you've got uh CPC, which is cost per click. Now this is a little more challenging in that you have to create really good ads that will get people excited to click on it, to actually click on an AD, because for a lot of us that feels like the last thing in the world you want to do. You know, you just want to look at the content. You don't want to click on an ad. But clicking on the ads, you know, that helps pay for the site. And also there may very well be stuff that the ads are

are advertising that you're interested interested in. So as uh cpc UM means that every time someone actually clicks on the ad, the advert advertiser will give a certain amount of money to the website. And that money, you know, it may be every several every thousand clicks in that case, but it tends to be a much higher rate than the impressions because now you've gone from people just looking

in an ad to people actually reacting to an ad. Uh. And then the other big one is c p A, which is cost per acquisition or cost per action and this is an affiliate program. This is when a company offers up an affiliate program where um the they have an agreement. For example, we we've done this in the past. Tech stuff has done this because we did and we did audible ads audible dot com. And the way that that one but who are as far as I know,

are not are not sponsoring this particular episode. But the way those those agreements tend to work is that the vendor works with the site or service. So for example, we'll stick with audible dot Com. They come to us and say, we would like to make a partnership with you if you you need to run an ad in your podcast. When you run that ad, you tell people to go to audible dot com and use this particular UM password or or code when they go, and then

they will get UM. They'll they'll be able to join for a discounted rate, and every user that does that, we will we will pay you a certain amount of money. And it all depends on the advertiser and the service. I mean, it's all this is all negotiable stuff, right and frankly, I am not privy to that. I have no idea what it is because that's not my part

of the business. I create content. So, uh, every time someone actually goes and signs up for these services using the ad the promotional code that the website or podcast whatever gives out, then money goes to that site from the advertiser, from the vendor. And again this is much more valuable because now you have people not just clicking on something but actually enrolling in some sort of product or service, and so that's considered much more valuable than

a typical impression would be. Now those are your major types. There are lots of other variations of this, but those were what I would say are the dominant ones in online advertising. Okay, and uh, and again all three of these, none of these are. None of these are on their own good or bad. It's all on how they are used and whether or not they are part of the experience in a way that's not intrusive, or if they

in fact get in your way and irritate you. Yeah, yeah, and then and that makes tracking all that much more valuable for the advertiser and for the sites. Um, because you know, as tastes change as to how the effectiveness of of web advertising is measured. Um, you know, they've they've gone from these through these different models, and sometimes they shift toward one and conventional wisdom says that's the best way to do it, and they'll change their mind

and shift back. So they track all of that information, um, just so that they have an idea of who they're reaching and how so, UM, you know that that's why they do a lot that. So Chris, you're you're probably gonna know the answer to this question, but I'm going to ask it and see if you see in fact, see if in fact you do know the answer. There is one company out there on the Internet that is

dominant as far as the web advertising business goes. As in, this is the company that provides the outlet for web advertising. It's not itself necessarily an advertiser. Do you know what that company is? I would have assumed it was a company that rhymes with Schmoogle. In fact, you are corrected, is Google, which according to at least some figures, has

about almost seventy of the online advertising market. That's very impressive. Yeah, you think about that, Think about all the different advertising companies that could be out there on the web, and for one to have nearly sevent of the market share, and you're talking billions of dollars of revenues going through this this whole industry, that is amazing and scary. You know. That's that's funny too, because that's the one type of

ad we didn't mention ad sense text text advertising. Well I did mention it briefly because I thought about the little bit and you know, but yes, but yeah, they don't do the you know, the banner ads or or sidebar ads, or or pop ups or pop unders. It's all done with text. They'll have sponsored results that kind of thing, exactly. It's it's just kind of funny that that much of the ad industry is dominated by something that doesn't actually use it whiches yeah and we you know, yeah,

so it's I mean, it's it's big business stuff. It's still even today, despite the fact that the web has been around for more than two decades now, um, we're really still trying to find the right balance between the value of advertising and um and and how it impacts the user. Because if the value you have advertising keeps falling as a result of users being alienated by ads, then web content creators have to find new ways to

make money. And without finding new ways to make money, we're not going to have nearly as much content on the web, and so it could turn out to be a bad thing for users in the long run. Now that doesn't mean that users should just sit there and say I love ads and click on everything. But if there are ads that are effective, then users probably shouldn't um complain about them too much, because again, the alternative

is that we lose all that content. In the long run, It's definitely something that you have to be willing to make the trade off for. Yeah, it's and it is tricky. I mean I as a consumer, I can tell you that a bad ad really ruins my mood when I'm on a on a website, even if I love the website. If it's a really bad ad, then my first reaction is I think, you know what, I'll just come back some other time. The different advertising campaign is running on

this site, and that wraps up this discussion about web ads. Obviously, things have continued to evolve since two thousand twelve, and I've talked about web advertising and advertising on the Internet in general in a few other episodes, So you can always go through the archive and look at those topics. If you are interested in learning more. To do that,

head on over to text stuff podcast dot com. That's our website where we have the archive, plus background information on me, links to our presence on social networking sites, and a link to our online store. And every purchase you make goes to help the show. If you have any suggestions for future topics I should cover on this show, you can email me at tech Stuff at how Stuff works dot com and I'll talk to you again really soon. Text Stuff is a production of My heart Radios How

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