Popular lore has it that the first banner ad appeared on HotWired in October 1994. It was from AT&T and though it was a little longer than today's banner ad, it set a standard.
From that humble beginning, banners evolved rapidly. They blinked. They moved. They allowed surfers to purchase items from inside the banner itself. They invited visitors to play Pong. They tried to be sexy, weird, intriguing, frenzied, or funny—as long as they brought in the clicks and the advertising dollars that content sites needed.
And they did, for a while. But after a while the clicks started falling off until they dropped to less than 0.5%. Advertisers got more desperate, making talking ads, pop-up ads, ads on the side of a page, ads in the middle of a page. As ad revenue dropped, ads got ever-bigger, ever-louder, and ever-more intrusive. Surfers, in self-defense, started using ad-blockers and other tricks to avoid the ads.
Such an escalation might go on forever, but some companies figured out a better way to provide site ads. Instead of getting bigger and louder, ads got smaller and quieter. Others, recognizing a need for cheaper and less noisy alternatives to the once mighty banner, have developed commercial applications to help Web sites serve up text-based advertising.
Google has a richly-deserved reputation as an excellent search engine. But when it comes to generating ad revenue, they're also innovative. By using text ads, they can put up to ten ads on a search result page that couldn't reasonably accommodate more than a few graphic banner ads.
"We started AdWords in the fall of 2000 because we wanted to give users information in the most efficient format for them to process," says David Krane, Google representative. "AdWords are also consistent with our Premium ad creative." (Google has had text ads on top of regular search results since January 2000.)
Some advantages of text-based ads are immediately apparent—they load faster than graphic ads, are more difficult to block, and plain text is easier to integrate into site design. But Google's implementation also meant that small clients could buy AdWords in a "self-serve" way, spending less than $100 at a time for campaigns. Not only does this model increase the potential number of Google advertisers, but it decreases the amount that Google has to rely on large advertisers. It also means that Google can devote fewer resources to ad sales.
"That was one of our main design goals," says Krane. "Our focus on small customers is also reflected in the tools we make available that make it easy for them to optimize their keyword and creative targeting." Consequently, Krane says, Google has "a number" of smaller clients who spend less than $100 a month on campaigns and, because of the available reporting tools, plenty of repeat business.
Google isn't the only site that's trying text-based advertising to generate revenue. Daypop.com, a search engine for news sites and Weblogs, includes text ads on its search result pages. Dan Chan is Daypop's developer. "Google proved that there was a demand for micro-advertising, for advertising on a small scale with a small budget. Text ads are simple and elegant and fairly easy to create and administer."
But why develop and implement a text-based ad system when his site had enough page views to get picked up by a banner-based ad service like DoubleClick? "I like doing things myself. I also wanted to keep it affordable so that almost anyone could afford to get the word out about their site." Chan describes the response to his ads so far as "lukewarm," but notes that he has not started advertising their availability yet. He also considers that he has a core audience—journalists and news junkies—that should be easy for potential advertisers to identify with.
Unlike Daypop, MetaFilter is a community site devoted to discussion and without an easily-definable audience. But Webmaster Matthew Haughey has had plenty of interest in his text-based advertising from MetaFilter readers who want to advertise to other readers. MetaFilter's ads actually started as a way to give community members a way to promote their own sites without clogging the discussion channels with self-promotion—a big no-no on MetaFilter.
Haughey concentrated on making his ad system as easy for everybody to use as possible. "I basically grabbed an off-the-shelf banner ad system, tweaked it for text-based ads instead of graphical, then integrated PayPal for an automated payment system. I got it down to the point where I get an email for an order, go to a URL, then accept the PayPal money and it's done."
Despite the fact that the audience demographics are ambiguous, Haughey's discovered a demand for the advertising. "It's been pretty successful so far. I've had about 250 people pay to advertise their site, service, or product." The ads themselves have also been pretty successful; Haughey estimates the average clickthrough rate for his text-based ads at about 2%, far better than the average clickthrough for banner ads these days.
Daypop and MetaFilter are both run by Web masters who are technically savvy enough to set up their own text-based advertising solutions, but not all Web sites have those kinds or resources. Recently, though, two new text-based ad networks were launched—Ad Farm and Advertising.com—and another, PyRads, plans to roll out an advertising network.
Advertising.com has been involved with email advertising for a long time, but has only recently expanded their advertising to WebSelect, which offers both banner and text-based advertising for site publishers. "Web surfers seem to respond more favorably to textual ads in some instances than much richer ads," says John Ferber, CIO of Advertising.com.
While Ferber does not feel that text ads will ever displace graphic ads, he thinks that they do have a place on Web sites and will probably enjoy increased usage. "A text ad is much cheaper to serve than a banner ad and as such should always be factored in modeling the true economics of an advertising campaign."
Blogger is a phenomenon in the online world, almost singlehandedly spreading the popularity of "Weblogging"—sites that combine diaries with news linking and commentary. But their popularity didn't seem to make much difference to online ad networks. "A while back, we were considering regular banners, and applied to several of the major ad networks, and no one would accept Blogger," said Evan Williams, CEO of Pyra, the company behind Blogger. "No one wanted to sell ads for us. So, since we had to sell them ourselves, if at all, we needed an integrated solution."
Blogger already had Blog*Spot, but that was a graphic ad network served by a third party. It also had a $50 minimum purchase, and Williams wanted the new ad solution to be more inclusive of small advertisers. "The minimum price is $10 on the Blogger text ads versus $50 for the Blog*Spot banners, so that attracts smaller advertisers who may just do it on a whim." Currently, PyRads is only serving Blogger.com, but Williams plans to expand it to make it available for other sites as soon as he's finished testing it on Blogger and can devote more developmental resources to it.
Text ads have gone from just Google a couple of years ago to several sites and even a few networks today. Content publishers who have avoided banner ads for whatever reason—long load times, poor choice of ads, inability to participate in an advertising network—may wish to consider text ads as a source of revenue. They won't bring in the kind of cash that banner ads did in their heyday, but they bring in better clicks and are much friendlier to user and content provider alike.
SIDEBAR: In 50 Words or Less
Text ads won't support games, fake (or real) forms, punched monkeys, and all those other mainstays of banner ads. And many administrators of text-based advertising say they wouldn't work anyway.
"I think it's simply good writing," says Matthew Haughey of MetaFilter. "My perception is that the things that work best are those that offer something specific and immediate," adds Williams of Blogger. This tends to leave out flashing graphics and obscure writing.
On the other hand, maybe a little mystery is okay—as long as it's not too much. Benson of Ad Farm suggests, "I think it's pretty safe to say that if you're trying to create a good ad, one, it never hurts to have a great Web site that you're advertising; two, speak to the audience as a person and not as a corporation; and three, leave them hanging a little as to what exactly they'll find when they click the link."
Krane of Google agrees with Haughey that good writing is important, but thinks brief writing is equally important: "Create a concise ad that communicates clearly the benefits of your product or service." Google's AdWords allows multiple ads from the same advertiser to rise or fall based on popularity: "These ads will each rotate against the same set of keywords, and the ads that have the highest clickthrough rates will be shown more often than the ones that have lower clickthrough rates."
SIDEBAR: Additional Resources
Advertising exchange using text ads instead of banner ads.
Yahoo! Groups email list for discussing micro advertising
(including text-based advertising)
The Complete Guide to Weblogs—Text Ads
A collection of information related to text-based advertising