Does Web 2.0 Advertising Work?

Marketing Sherpa has some interesting thoughts on just that one question.

Ads on non-2.0 sites (classic editorial content sites) convert 31% better than ads run against user-generated content.
Ads on top-brand non-2.0 sites (defined as comScore’s top 250) convert 175% better than user-generated content sites.
However, 2.0 media is so *cheap* (as of now anyway) that it’s still worth testing. The minute the price goes up, buyer beware.
Source: Marketing Sherpa

The statistics are interesting in that getting advertising for smaller sites is going to be difficult outside of Adsense, Adbrite and AdEngage. Those three groups basically offer blanket advertising using many sources as a pool. The run of network ads are the best way to make money as a small web site owner. The conversion rate is poor, usually less than 1% of all ads served, with a minimal payout of around 4 cents per ad. These numbers don’t really work at 100’s or even 1000’s of users per day. They work out better in the 100,000’s or higher numbers.

The catch 22 though is once you get the point where you get 10,000’s of thousands of visitors a day is about the time that the big media companies are going to start showing an interest in you. This is where your ranking and authority come into play into making advertising work for the web site.

Not many websites are going to make it to 10,000’s of thousands of users a day, many just perk along at hundreds or thousands of users. The data above though shows that web sites that depend primarily on user generated content, no matter how banal will have an even harder time getting the Madison avenue executives show up on their door step. While much of what people write about on their personal blogs can be pretty dull, if not incipient. That is the nature of personal blogging, and we are really only interested in the blog if it has some stuff we can laugh at.

The middle tier are people who blog, like Techwag and others who are using this as a way to address an audience who they think would be interested in technology, or needlepoint, or other hobbies. While the blog may not be the best format for this, but it is an easy format to master. And that is the key to blogging in the second tier and well into the first tier (A list and B list bloggers). It upsets the model for what is happening in the advertising space.

While Techwag would love to get money from the bigger advertising companies, the process entails building up that user base, to the point where they will pay attention. Until then we will stick with the Google advertising model and use it to offset costs. There are millions of blogs in this position, and the numbers as quoted above will make selling advertising on Web 2.0 sites more interesting in the longer run.