??The decline in Internet advertising - though paralleled by a similartr end in print advertising - had more serious and irreversibleimplications. Most content dots were based on China Wholesale Hot Stamping Machine Manufacturers ad-driven revenuemodels. Online advertising was supposed to amortize start-up andoperational costs and lead to profitability even as it subsidized freeaccess to costly content.A similar revenue model has been successfully propping up printperiodicals for at least two centuries. But, as opposed to their onlinecounterparts, print products have a few streams of income, not leastamong them paid subscriptions.Moreover, print media kept their costs down in good times and bad.Dots devoured their investors' money in a self-destructive andavaricious bacchanalia.But why did online advertising collapse in the first place? Was itineffective?Advertising is a multi-faceted and psychologically complex phenomenon.It imparts information to potential consumers, users, suppliers,investors, the community, or other stakeholders in the firm. Itmotivates each of these to do his bit: consumers to consume, investorsto invest and so on.But this is not the main function of the advertising dollar.

Moderneconomic signal theory has cast advertising in a new and surprising -though by no means counterintuitive - light.According to this theory, the role of advertising is to signal to themarketplace the advertiser's resilience, longevity, wealth, clout, and dominance. By splurging money of advertising, the advertiser actuallyinforms us - the "eyeballs" - that it is here to stay, sufficientlyaffluent to finance its ads, stable, reliable, and dominant."If firm X invested a million bucks in advertising - it must be worth more than a million bucks" - goes the signal. "If it invested so muchmoney in promoting its products, it is not a fly-by-night". "If it can throw money at an ad campaign, it is stable and resilient". This signal is missing in online advertising. It drowns in noise. Theonline noise to signal ratio was unacceptable to advertisers - so they stopped advertising. When the noise to signal ratio tops a certainlevel - ads cease to be effective. The readers or spectators becomeinured to the messages - both explicit and implicit. They tune off.The noise in online advertising stems from two sources.A critical element in the signal is lost if the ad is not paid for. Onlypaid advertising conveys information about the purported health andprospects of the advertiser. Yet, the Internet is flooded with freeadvertising: free classifieds, free banner ads, ad exchanges. The paidads drown in this ocean of free ads. There is often no way of telling apaid ad from a free one - without reading the fine print.Moreover, Internet users are a "captive audience". It is easy to flipad-besieged channels on TV, or turn the ad-laden leaf of a newspaper.

It is close to impossible to avoid an ad on the Net. Banner ads are anintegral part of the page. Pop-up ads pop up. Embedded ads are embedded.One needs to install special applications to avoid the harassment.This leads to desensitization and a revolt of the user. Users resent theintrusion, are incensed by the coercive tactics of advertisers, nervewrecked by protracted download times, and unnerved by the content ofmany of the ads. This is not an environment conducive to clinching dealsor converting to sales.There is also the issue of credibility. The bulk of online advertisingemanates from dots. Even prior to the recent stock exchangemeltdown, these were not considered paragons of rectitude and truth inadvertising. People learned to distrust most of what they read inInternet ads. Scorched by scams, false promises, faulty products, shoddyor non-existent customer care, broken links, or all of the above - userslearned to ignore Web advertising and relegate it to their mental dustbins.More about credibility on the Web here:The In-Credible WebWill the medium ever recover? Probably not. As the Internet is takenover by brick-and-mortar corporations and governments, online fare willcome to resemble the offline sort. Online ads will be no more thaninteractive renditions of their offline facsimiles. The revenue modelwill switch from advertising to subscriptions and "author-pays". Thedays of free content financed by advertising are over.This does not mean that the days of free content are over as well.