Online ads lose tractions as customers refuse to click

by Maya Valluru, News Editor

A video of crispy grilled shrimp falling gracefully onto a plate in slow motion before a math tutorial. A portal to a virtual world of celebrity chat rooms pervading your sidebar. Pop-up advertisements that block your view of the article you’re trying to read.

These advertisements probably sound familiar. That’s because they’re everywhere. But the click rate for these online ads has gone down significantly over the past few years, going from a three percent click rate to around 0.2 percent.

A lot of people think that it is just you get paid by views, which is a common misconception. The revenue [from advertisements] actually comes from clicks.

— Chloe May, Youtube Content Creator

Daniel Hudkins, the upper school director of information technology service and support, attributes the lower click rates to the signal-to-noise concept. This idea explains that one can hear a signal in the midst of a large amount of noise if it’s recognizable and interesting, but once a person becomes acclimated to hearing it, the signal just blends in with the noise.

“Because of the signal-to-noise problem, we decided that [online advertisements are] noise, not signal,” says Hudkins. “It’s more targeted [to the user] than it used to be, but we’ve gotten used to that too.”

Some of the most prominent online ads appear before videos on YouTube. Many people have downloaded ad-blocking applications to avoid the interruption in viewing, and several companies have provided the option to skip the ad and continue to the video five seconds after it begins in case someone is not interested.

For YouTube content creators such as content creator Chloe May, a sophomore at Chapman University’s Dodge College of Film and Media Arts, these promotional videos are a major source of revenue.

“A lot of people think that it is just you get paid by views, which is a common misconception,” May said. “The revenue actually comes from clicks. Each click is going to be a certain amount of money, like a certain amount of revenue that you get. And through whatever partnership that you are with, you are going to get a certain percentage of that.”

While online ads are receiving far less traffic than they did when they were introduced, mobile advertisements are increasingly rising in popularity.

Mobile applications are proving far more lucrative for companies who wish to advertise. In particular, major social media sites that are most often visited through smartphone applications are using a growing number of advertisements.

Facebook includes advertisements in users’ feeds that are more relevant to the specific individual than online ads are. With criteria including one’s age, location, liked pages, friends and even pages liked by friends rather than just relevant searches, advertisements on social media applications are often more appealing to the user.

Other platforms, including Snapchat and Instagram, usually feature companies that are selected not for the individual user but for most members who live in a particular area or are of the same age group.

This piece was originally published in the pages of The Winged Post on October 11, 2016.