Where will money come from when the ads run dry?

Online ads don’t work. They’re propping up the digital media industry, and they just don’t work.

New research found that “only 44% of digital display ads received any views at all. And, of those, only 9% of ads received more than a second’s worth of attention.” That means that, out of 100 ads, only 4 get looked at for more than a second.

Marketers spend money to get their message across. In digital, that manifests itself in numbers of views and clicks. Those who think online ads work point to massive impressions, brand lift and content engagement as signs of efficacy, framing low CPMs as a bargain that allows for wide reach.

But if that’s the case, why has other research found that UK marketers waste more than £600m per year on ads that aren’t viewable? Why did Bloomberg run an exposé on the rampant bot traffic sucking away marketing dollars? And why, again, do only four ads out of 100 get more than a second of attention?

As the Bloomberg article starts out, “Marketers thought the Web would allow perfectly targeted ads. Hasn’t worked out that way.” This is a deeper issue than the growth of ad blocking or the difficulties of reaching consumers on mobile. It’s about more than coming up with a simpler, less intrusive thing to put in the banner box. Internet users are blind to advertising, and marketers will find that out eventually. When they do, what will happen to digital media?

Publishers have thought of this, or are inadvertently addressing it as CPMs fall below what it takes to keep the lights on. Some are going for massive scale, usually across specialized verticals. Some are shifting focus to sponsored content to boost ad revenue, a strategy the New York Times’ John Herrman says “is becoming king in a Facebook world.” And almost everyone, from Vox to the Washington Post, is diversifying, leaning on events, podcasts, newsletters and a whole host of other offerings to shield themselves from a drop in ad dollars. We need experimentation to keep the industry moving forward, but this is all predicated on reader loyalty and engagement. That could be problematic for digital media as it stands.

Problematic because loyalty does not follow naturally from scale. Trade association research shows that 43 percent of readers who come from social media don’t remember what outlet published the story. And if people can’t even remember your name, they won’t try your Slack bot.

On a positive note, the readers who do use more engagement-heavy products care about the brand and pay attention. That makes them valuable to advertisers, yes, but ads shouldn’t be the focus. Fitting the same revenue model into a new pipe isn’t future proof.

If publishers want to thrive past display advertising, it’s time to shed scale. Focusing on core audience lets digital media make products for an audience that will actually use them. It could even mean paying customers.

We’re getting to a point where big numbers will fail to produce return. When that happens, publishers with an engaged, loyal readership will do best. Everyone else will just have to wait for the next Facebook trend.