On Thneeds and the “Death of Display”

It’s all over the news these days: Display advertising is dead. Or put more accurately, the world of “boxes and rectangles” is dead. No one pays attention to banner ads, the reasoning goes, and the model never really worked in the first place (except for direct response). Brand marketers are demanding more for their money, and “standard display” is simply not delivering. After nearly 20 years*, it’s time to bury the banner, and move on to….

…well, to something else. Mostly, if you believe the valuations these days, to big platforms that have their own proprietary ad systems.

All over the industry, you’ll find celebration of new advertising-driven platforms that have eschewed the “boxes and rectangles” model. Twitter makes money off its native “promoted” suite of marketing tools. Tumblr just this week rolled out a similar offering. Pinterest recently hired Facebook’s original monetization wizard to create its own advertising model, separate from standard display. And of course there’s Facebook, which has gone so far as to call its new products “Featured Stories” (as opposed to “Ads” – which is what they are.) Lastly, we mustn’t forget the grandaddy of native advertising platforms, Google, whose search ads redefined the playing field more than a decade ago (although AdSense, it must be said, is very much in the “standard display” business).

Together, these platforms comprise what I’ve come to call the “dependent web,” and they live in a symbiotic relationship with what I call the “independent web.”

But there’s a very big difference between the two when it comes to revenue and perceived value. Dependent web companies are, in short, killing it. Facebook is about to go public at a valuation of $100 billion. Twitter is valued at close to $10 billion. Pinterest is rumored to be worth $4 billion, and who knows what Tumblr’s worth now – it was nearly $1 billion, on close to no revenues, last Fall. And of course Google has a market cap of around $200 billion.

Independent web publishers? With a few exceptions, they’re not killing it. They aren’t massively scaled platforms, after all, they’re often one or two person shops. If “display is dead,” then, well – they’re getting killed.

That’s because, again with few exceptions, independent web sites rely on the “standard display” model to scratch out at least part of a living. And that standard display model was not built to leverage the value of great content sites: engagement with audience. Boxes and rectangles on the side or top of a website simply do not deliver against brand advertising goals. Like it or not, boxes and rectangles have for the most part become the province of direct response advertising, or brand advertising that pays, on average, as if it’s driven by direct response metrics. And unless you’re running a high-traffic site about asbestos lawsuits, that just doesn’t pay the bills for content sites.

Hence, the rolling declaration of display’s death – often by independent industry news sites plastered with banners, boxes and rectangles.

But I don’t think online display is dead. It just needs to be rethought, re-engineered, and reborn. Easy, right?

Well, no, because brand marketers want scale and proof of ROI – and given that any new idea in display has to break out of the box-and-rectangle model first, we’ve got a chicken and egg problem with both scale and proof of value.

But I’ve noticed some promising sprigs of green pushing through the earth of late. First of all, let’s not forget the growth and success of programmatic buying across those “boxes and rectangles.” Using data and real time bidding, demand- and supply-side platforms are growing very quickly, and while the average CPM is low, there is a lot of promise in these new services – so much so, that FMP recently joined forces with one of the best, Lijit Networks. Another promising development is the video interstitial. Once anathema to nearly every publisher on the planet, this full page unit is now standard on the New York Times, Wired, Forbes, and countless other publishing sites. And while audiences may balk at seeing a full-page video ad after clicking from a search engine or other referring agent, the fact is, skipping the ad is about as hard as turning the page in a magazine. And in magazines, full page ads work for marketers.

Another is what many are now calling “native advertising” (sure to be confused with Twitter, Tumblr, and others’ native advertising solutions…) Over at Digiday, which has been doing a bang up job covering the display story, you’ll see debate about the growth of  publisher-based “native advertising units,” which are units that run in the editorial well, and are often populated with advertiser-sponsored content. FMP has been doing this kind of advertising for nearly three years, and of course it pioneered the concept of content marketing back in 2006. The key to success here, we’ve found, is getting context right, at scale, and of course providing transparency (IE, don’t try to fool an audience, they’re far smarter than that.)

And lastly, there are the new “Rising Star” units from the IAB (where I am a board member). These are, put quite simply, reimagined, larger and more interactive boxes and rectangles. A good step, but not a panacea.

So as much as I am rooting for these new approaches to display, and expect that they will start to be combined in ways that really pay off for publishers, they have a limitation: they’re focused on what I’ll call a “site-specific” model: for a publisher to get rewarded for creating great content, that publisher must endeavor to bring visitors to their site so those visitors can see the ads.  If we look toward the future, that’s not going to be enough. In an ideal Internet world, great content is rewarded for being shared, reposted,  viewed elsewhere and yes, even “liked.”

Up to now, that reward has had one single currency: Traffic back to the site.

Think of the largest referrers of traffic to the “rest of the web” – who are they? Yep – the very same companies with huge valuations – Google, Facebook, Twitter, and now Pinterest. What do they have in common? They’ve figured out a way to leverage the content created by the “rest of the web” and resell it to marketers at scale and for value (or, at least VCs believe they will soon). It’s always been an implicit deal, starting with search and moving into social: We cull, curate, and leverage your content, and in return, we’ll send traffic back to your site.

But given that we’re in for an extended transition from boxes and rectangles to ideas that, we hope, are better over time, well, that traffic deal just isn’t enough. It’s time to imagine bigger things.

Before we do, let’s step back for a moment and consider the independent web site. The…content creator. The web publisher. The talent, if you will. The person with a voice, an audience, a community. The hundreds of thousands (millions, really) of folks who, for good or bad, have plastered banners all over their site in the hope that perhaps the checks might get a bit bigger next month. (Of course this includes traditional media sites, like publishers who made their nut in print, for example). To me, these people comprise the equivalent of forests in the Internet’s ecosystem. They create the oxygen that feeds much of our world: Great content, great engagement, and great audiences.

Perhaps I’m becoming a cranky old man, a Lorax, if you must, but I’m going to jump up on a stump right now and say it: curation-based platform models that harvest the work of great content creators, creating “Thneeds” along the way, are failing to see the forest for the trees. Their quid pro quo deal to “send more traffic” ain’t enough.**

It’s time that content creators derived real value from the platforms they feed. A new model is needed, and if one doesn’t emerge (or is obstructed by the terms of service of large platforms), I worry about the future of the open web itself. If we, as an industry, don’t get just a wee bit better at taking care of content creators, we’re going to destroy our own ecosystem – and we’ll watch the Pinterests, Twitters, and yes, even the Google and Facebooks of the world deteriorate for lack of new content to curate.

Put another way: Unless someone cares, a whole awful lot…it isn’t going to get better. It’s not.


So I’m here to say not only do I care, so do the hundreds of people working at Federated Media Publishing and Lijit, and at a burgeoning ecosystem of companies, publishers, and marketers who are coming to realize it’s time to wake up from our “standard display” dream and create some new models. It’s not the big platforms’ job to create that model – but it will be their job to not stand in the way of it.

So what might a new approach look like? Well first and foremost, it doesn’t mean abandoning the site-specific approach. Instead, I suggest we augment that revenue stream with another, one that ties individual “atomic units” of content to similar “atomic units” of marketing messaging, so that together they can travel the Seussian highways of the social web with a business model intact.

Because if the traffic referral game has proven anything to us as publishers, it’s that great content doesn’t want to be bound to one site. The rise of Pinterest, among others, proves this fact. Ideally, content should be shared, mixed, mashed, and reposted – it wants to flow through the Internet like water. This was the point of RSS, after all – a technology that has actually been declared dead more often than the lowly display banner. (For those of you too young to recall RSS, it’s a technology that allows publishers to share their content as “feeds” to any third party.)

RSS has, in the main, “failed” as a commercial entity because publishers realized they couldn’t make money by allowing people to consume their content “offsite.” The tyranny of the site-specific model forced most commercial publishers to use RSS only for display of headlines and snippets of text – bait, if you will, to bring audiences back to the site.

I’ve written about the implications of RSS and its death over and over again, because I love its goal of weaving content throughout the Internet. But and each time I’ve considered RSS, I’ve found myself wanting for a solution to its ills. I love the idea of content flowing any and everywhere around the Internet, but I also understand and sympathize with the content creator’s dilemma: If my content is scattered to the Internet’s winds, consumed on far continents with no remuneration to me, I can’t make a living as a content creator. So it’s no wonder that the creator swallows hard, and limits her RSS feed in the hopes that traffic will rise on her site (a few intrepid souls, like me, keep their RSS feeds “full text.” But I don’t rely on this site, directly, to make a living.)

So let’s review. We now have three broken or limping models in independent Internet publishing: the traffic-hungry site-specific content model, the “standard display” model upon which it depends, and the RSS model, which failed due to lack of “monetization.”

But inside this seeming mess, if you stare long and hard enough, there are answers staring back at you. In short, it’s time to leverage the big platforms for more than just traffic. It’s time to do what the biggest holders of IP (the film and TV folks) have already done – go where the money is. But this time, the approach needs to be different.

I’ve already hinted at it above: Wrap content with appropriate underwriting, and set it free to roam the Internet. Of course, such a system will have to navigate business process rules (the platforms’ Terms of Service), and break free of scale and ROI constraints. I believe this can be done.

But given that I’m already at 2500 words, I think I’ll be writing about that approach in a future post. Stay tuned, and remember – “Unless….”


*As a co-founder of Wired, I had a small part to play in the banner’s birth – the first banner ran on HotWired in 1994. It had a 78% clickthrough rate. 

**Using ad networks, the average small publisher earns about seventy-five cents per thousand on her display ads. Let’s do the math. Let’s say Molly the Scone Blogger gets an average of 50,000 page views a month, pretty good for a food blogger. We know the average ad network pays about 65 to 85 cents per thousand page views at the moment (for reasons explained above, despite the continuing focus of the industrial ad technology complex, which is working to raise those prices with data and context). And let’s say Molly puts two ads per page on her site. That means she has one hundred “thousands” to sell, at around 75 cents a thousand. This means Molly gets a check for about $75 each month. Now, Molly loves her site, and loves her audience and community, and wants to make enough to do it more. Since her only leverage is increased traffic, she will labor at Pinterest, Twitter, Facebook, and Google+, promoting her content and doing her best to gain more audience.

Perhaps she can double her traffic, and her monthly income might go from $75 to $150. That helps with the groceries, but it’s a terrible return on invested time. So what might Molly do? Well, if she can’t join a higher-paying network like FMP, she may well decide to abandon content creation all together. And when she stops investing in her own site, guess what happens? She’s not creating new content for Pinterest, Twitter, Facebook and Google to harvest, and she’s not using those platforms to distribute her content.

For the past seven years, it’s been FMP’s business to get people like Molly paid a lot more than 75 cents per thousand audience members. We’re proud of the hundred plus million dollars we’ve injected into the Independent web, but I have to be honest with you. There are way more Mollys in the world than FMP can help – at least under current industry conditions. And while we’ve innovated like crazy to create value beyond standard banners, it’s going to take more to insure content creators get paid appropriately. It’s time to think outside the box.


Special thanks to folks who have been helping me think through this issue, including Deanna Brown and the FMP team, Randall Rothenberg of the IAB, Brian Monahan, Chas Edwards, Jeff Dachis, Brian Morrissey, and many, many more. 


38 thoughts on “On Thneeds and the “Death of Display””

  1. Great ideas percolating here, John:
    Moving from focus on content to focus on container… This seems like a
    first step away from the Wisdom of the Click towards the Wisdom of the
    Language(?) — yet I think perhaps it’s time to *retire* Google (they
    *were* successful, but IMO they have more of a past than a future — but
    of course near-sighted fools will call that “crazy” 😉 BTW: I think
    people who are long on Pinterest will definitely get burnt (maybe that’s
    also the case for the elephant in the room — $100B sounds rather
    far-fetched if you ask me… unless they manage to reign in the
    astronomical visions and bring the game-plan back down to Earth [then
    they *might* have a chance ;])

      1. I think people find it difficult to grasp that what matters more than — or least just as much as — the ability to *read* is the ability to *write*. People don’t seem to understand that without some skin in the game, that isn’t going to happen (or at least not on a site where someone will actually be able to read what they write — because it simply might never be seen).

      2.  Norbert, I would love to hear a paragraph or two more on what you mean by this. I think I almost get your meaning…

  2. This is a great article to ongoing problem that needs to addressed.  How do you incrementally the reward to the creators – the oxygen of the content – in a way that Google, Facebook, Pinterest and the Huffington Post do not.  You are correct that the creators of original content – text, image and graphics – who have their content aggregated and shared on the web need to be compensated in a greater way than they are now.  In addition to parsing out their headline, first 200 characters of the respective article and possible associated image, perhaps the “aggregator” (Google, Facebook, Pinterest) also need to parse out the associated banner or affiliate ad as well and display that along side the article/content?  Instapaper, Read It Later and Readability are going in the opposite direction of rewarding the content creators be parsing out the entire article whereas the Techmeme cluster of topical aggregators do a much better job.

  3. I’m not a tech person, just a content creator. But…

    I’m wondering if Google could drive this. When a person places Adsense on piece of content, it “attaches” itself to the content on that page, or to perhaps just a portion of the page (keyword-based). When the content is moved to another site, the ad goes with it, most likely shortened down to just a link (which wouldn’t cost advertisers the same amount). Kind of like Tynt works (it only attaches its link to copies over a certain word count).

  4. You are just NOW getting around to noticing this? Hahahaha man I would have pegged you as more engagement savvy. Why in the hell do you think Google is trying to usher in every new technology they can get their hands on? They see the writing on the wall as far as ROI on display and its a train wreck in lost value that doesnt get better but worse.

    Humans are developing filters and a higher content noise threshholds, that even smart folks such as yourself have no conception of. Im an old guy and I cant tell you the last time anything display even caught my eye to remotely interrupt my train of thought.

    Think about that in contrast to anyone under 30 years old now. Good luck with ads in the future.

  5. John, This is a great fire starter to the powerful discussion needed around establishing a commonly understood and measurable currency of engagement…  Thank you.

    1. Thanks Jeff. We certainly are in a shape shifting phase, with many, many smart people and companies offering solutions. I hope we don’t default to something deeply flawed, as we did in version 1 of CPM advertising on the web…

  6. Very Interesting,

    Taking things to an extreme, this is how I feel a hypothetical worst case scenario would play out.
    If all Display Advertising spend went to $0 , then

    1) A publisher would need to create a pay wall to protect and monetize his content. ( Pay for subscription services)

    2) If he does not then he cannot make any money to sustain his content creation. Content creation stops and is not available to be shared on the ‘Dependent Web’, so without the ‘Independent Web’ the usage of Pintrest/Facebook drops or becomes less engaged and less monetization happens.

    So then the ‘Dependant Web’ could do 2 things

    1) Develop an ecosystem which creates- consumes – monetizes their own content. (YouTube perhaps?) or just buy the Major content companies and churn out content to feed the beast.

    2) Create a payment framework to pay the ‘Independent Web’ for each user reffered/content shared.

    There probably are a million other variables at play to create different scenarios , but this is an interesting and thought provoking piece. Great stuff John!

  7. Broadly speaking a lot of this makes sense, though I take issue with the fact that the ‘dependents’ Facebook, Twitter et al all make money because their ad mechanism is site specific. They make money (does Twitter even make money?!) because their content is basically free. In fact I’d argue Facebook’s ad model is actually pretty broken and Twitter’s is probably even worse. Let’s not forget that the biggest ‘dependent’ in Battelle’s piece is Google, who are fairly reliant on traditional display themselves.

    Still, Battelle is bang right that ad standardisation is as much of a curse as it ever was a blessing.

  8. So if you use tv channels as a metaphor for the social networks/people aggregators – with facebook, twitter, tumblr, g+, pinterest being the nbc, cbs, tbs etc of tv then the “content providers” (techcrunch, gizmodo and the likes) for these “web channels” will have to hit a substantial scale before they can strike revenue sharing deals with the “web channels”. 
    This is feasible if you consider that the constant flow of content from the open web/apps on the “web channel” is necessary for the channels to be alive themselves and the users to keep coming back to scroll through their feeds.
    Is this something along the lines of what you have in mind John?

    1.  Maybe we need content aggregators between creators and ad sellers. Aggregator acts like an agent that validates the quality of the content under his umbrella and strikes the best ad deals possible for for his clients as a group. Achieves scale in that way. Perhaps agents specialize in certain areas, etc. Reputation and quality would be king.

  9. john said:
    >   I don’t rely on this site, directly, to make a living.

    if you want to share stuff, go ahead, on the open web.
    or, if you want to get paid for it, take your stuff private.
    but don’t “share it” and then expect to get paid, at least
    not “directly”. go find some other way to “monetize” it.


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