Bigger issue for me is that the myth of market efficiency in online advertising is being unpacked. So much of it is part of a secondary economy that is all about forcing consumers through the least efficient route to their destination. A simple example is the pollution of search results with spam sites.

why are you focusing on the negatives when the market is so obviously oversold and sentiment is so bearish. wait for the market to rally then come out with the negative chatter.

yes, ads are annoying. they always have been, and they have not gotten any more so in the past 5 years. the trend toward a cleaner web page has already occurred.... yahoo is dead and google is not. this is an old story.

Moi, negative? Hardly. I'm the the one calling for a savage bounce higher and oil at $70. Strange definition of bearish, if that's bearish.

[Yawn]

Google knew this a long time ago. That's part of why their conversion ratio is higher.

Some of the social networks would be wise to pay heed to this issue -- you have to blend in to the content that the users are interested in to avoid the mental filtering.

There are ads online? It's easy to forget when you surf using Firefox and Adblock.

+1 to Firefox and Adblock, and also NoScript, the other godsend.

But more to the point, Joe's Grandma Q. Internetuser is not being conditioned as such. They would never say "being someone who browses the Web several hours a day for both work and enjoyment." If we're talking about the savvy consumer, who is in the small minority, of course they are ahead of the curve. But the great crowd is in Homer Simpson territory: "Free iPod for completing a survey on a banner ad? I can't possibly lose!"

If there is a widespread inoculation to ads, it's probably a generation gap that won't become dominant for decades.

[/speculation]

I think it is totally safe to say that the people who interact with ads, esp. CPC ads on google, are not your early adopter, 20's males making 60k a year+. You want to reach those folks, try getting yourself a viral video on digg.

But are they a representative sample of all internet users? Who does click on those ads? This is a nice perspective on that question: http://www.zephoria.org/thoughts/archives/2007/12/03/who_clicks_on_a.html

There is an alternative theory that paid results for some common search terms are actually becoming higher quality results given all the crazy SEO that is going on out there, but I am not 100% convinced.

I think that's absolutely true - I find myself ignoring or raising my nose at ads all day long. I would say I'm more likely to click on an ad by accident than on purpose (and subsequently be surprised by the very existence of the ad as I am being redirected...).

There is a side-effect to all these (IMHO) poorly done ads - for some sort of sick, twisted, raised on MTV and Super Bowl ads mental programming, I find myself actually -appreciating- online ads that are done well. Pandora (the online radio station) does a great job with ads, and sometimes incorporates them directly into the background of the music player. I've actually found myself clicking 'next' just to see how the ads will change(lame I know...).

I'm always intrigued when people talk about ads on the Internet. I must remember to turn off Privoxy every year or so to see what the state of the art is...