Ad space is worth more than clicks

A week or so ago Jason Calacanis wrote a post about attention data and more tangentially about online advertising. He also flat out stated something that I think the web advertising community is probably (to the benefit of the advertisers) ignoring more than it should:

What I really hate about the CPC and CPL models is that when you embrace them you’re saying that there is no value to the impression. That looking at an advertiser is worth nothing. I’ll never except that as a publisher. No one clicks on a billboard or magazine ad and people pay a lot of money for those.

The wild, unbridled success of the Google pay-per-click model of advertising, especially in the “long tail” (did I use that term right?) market of individual blogs all over the world, has helped to define the way in which money is being spent on online advertising. The projected $50 to $100 million businesses are spending this year is quite probably based largely in the text-click-pay model.

The problem is that the more success theGoogle method enjoys, the more it hurts the greater web publishing sphere. Pay-per-click works wonderfully well in any service where users visit a site with the intention of clicking on a link. If you make a search in Google and an ad pops up that happens to be the most relevant link, there’s no reason not to click on it. Voila! Money for Google, click for the ad.

This method breaks down horribly on pages with content. All of a sudden, the web page is trying to keep the reader rather than send it somewhere else. In other words, most sites aren’t designed around sending viewers elsewhere — if they were, there’d be a lot less internet to go around.

But the pay-per-click model ignores the value of exposure. If a content site gets several million page views per months, that means a top banner gets several million impressions per months, which means that several million viewers have been exposed to your product. Throughout the history of advertising, this is how the equation has worked. Why is the click so important?

The bottom line is that there’s value in exposure, folks, and most of us are giving it away for free.