For most consumers, understanding why companies charge what they do for a product is an absolute mystery. This is especially perplexing for them when they see two similar products side-by-side, but one costs 25% more than the other.
While pricing is confusing to customers, it is also a challenging and often complex decision for marketers. This is due to numerous internal and external factors affecting what will eventually impact the final price. But as we noted, customers don’t really understand pricing or what factors impact price. They only know, that for some products, the amount of money they need to give up to purchase the product does not make sense to them.
In our last post regarding ad blocking, the general tone is one that paints an unclear picture for the future of online and mobile advertising. While we suggested several options marketers may have to address ad blocking, many ad industry folks are truly concerned that the long-term prognosis does not seem all that rosy for advertising delivered through computers and mobile devices.
Well, that is a picture that has been painted for many companies and industries in the past only to see the prediction of dire straits never coming about. Certainly the most obvious recent example is Apple, which in the mid-1990s was mostly written off as a computer company that was reaching the end of its life. Of course, naysayers were proven wrong when Steve Jobs brought new ideas to the company, and everyone knows the rest of the story.
For many websites that rely heavily on advertising as a source of revenue, such as news sites, blogs, information sites and other content publishers, last week turned out to be an upsetting one. These sites and others are now bracing for a potentially major reduction in advertising revenue, which may occur as a result of the spread of ad blocking technology. To better appreciate why these sites are concerned, it is important first to understand how most online advertising works.
In the world of online advertising, nearly all advertisements displayed on websites (and on mobile apps) are delivered by specialized ad networks that manage all aspects of finding advertisers, managing payments and delivering ads. There are hundreds of ad networks, with the largest being owned by well-known tech companies Google, Yahoo and Microsoft. Making money from advertising simply requires a website to submit a request to be part of an ad network. If approved (some ad networks have higher requirements than others), the website places a small amount of computer code on their site, and the ad network will begin displaying ads.