Online advertising is plummeting. It has caused Fark’s founder, Drew Curtis, to sound the alarm and say that the site is facing an “existential threat”.
For better or worse, online websites have helped websites stay online and stay free. For a number of website owners, ourselves included, online advertising has become a sort of necessary evil. The choice is typically either put some advertising up to help pay the server bills or shut down entirely. Because of this, online advertising has continually grown to become a mature industry. This in spite of how many readers get upset at the site of seeing any ads at all.
For the most part, things have been rolling along somewhat nicely. Things took a hit during the 2008 financial crises and advertising revenues have dipped in recent years as bigger players demand bigger pieces of the ad revenue pie. Unfortunately, with COVID-19, everything in real life is shutting down chunk by chunk. That ultimately defeats the purpose of online advertising. Why advertise when your doors are closed for the foreseeable future? So, as a result, the ripple effects are certainly being felt by ad supported websites.
With plummeting ad revenue, this is certainly putting the squeeze on websites revenue streams. Fark.com is apparently one of those sites. Fark is a social news website that takes funny or normal news articles and attributes a satirical or funny take to news stories. With a loyal userbase and a respectable amount of traffic, you’d think that they have a better footing than most. Website founder, Drew Curtis, apparently says otherwise. Late last month, Curtis issued the following comments:
Back in January 2008, ad revenue went to practically zero for a little over a year. Interestingly, it preceded the worst of the financial crisis by about six months. That was the year that I learned that when financial times get tough, ad budgets get cancelled first.
The ad market hasn’t been super strong this year, but as you’re probably aware, the pandemic has kicked off a financial crisis. Although the online ad market is far more mature today than it was back in 2008, I suspected we’d probably start seeing a revenue drop starting next week after April 1st because ad budgets are drawn up quarterly.
However, something unprecedented is happening.
Late last week, a fellow Farker who is CTO of an adtech company we’ve been working with closely hit me up with a warning. He said that as of last Thursday, they’re seeing industry-wide cancellations. Companies aren’t waiting until the 2nd quarter – they’re pulling ads -now- on existing deals. Understandable given the current situation, but it doesn’t help Fark at all.
The existing ads are still bringing in some revenue, although the advertisers I’m seeing are pretty strange – not sure what company is trying to sell me bikinis during a pandemic, but whatever, you be you Mr. or Ms. bikini retailer.
However, it’s not going to be enough.
Curtis went on to say that if the site doesn’t get more subscribers, he would consider implementing the dreaded ad block blockers. Curtis suggests that 60% of the sites readers use them. He says he understands why some would use them beyond just not wanting to see ads anymore. So, for those who can’t afford the monthly charge, he says users can contact them and they would offer advertising free services.
Shortly after, Curtis released another comment saying that the site is facing an existential threat at this point now that he has more information of his situation. From Fark:
Since the last NotNewsletter, we discovered what specifically caused the sudden rapid decline in ad revenues – turns out it affected all news sites, not just us. Apparently branding experts are reluctant to run advertising on pages that mention COVID-19. The theory is they don’t want their brand to be associated with negative connotations. The problem, however, not just for us but for all news sites, is that 90%+ of all content is COVID-related right now. As a result, when 3,000 brand advertisers all simultaneously block the words COVID-19 and coronavirus, news site ad revenue plummets. You can read more about that and how it threatens the entire online news ecosystem in this great summary article by Craig Silverman.
However, there’s more bad news – also last week the IAB, which is the primary trade group for online advertising among other things, released the results of a survey of ad buyers to try to figure out what effect the lockdown will have on ad revenues. The short version is it’ll be worse than 2008, which is pretty dire because in 2008, Fark’s revenue dropped to near zero. There’s more info and data from the IAB survey here.
I’m exploring every option available to us, including SBA disaster loans. Things do not look good, but I promise I will keep pushing to hold things together until all options are expended. Which may have to include blocking ad-block use on Fark.
It’s not just Fark that’s in trouble either – the Columbia Journalism Review is just this morning sounding the alarm about the impending local news apocalypse. It’s going to hit all of us. Support your local news outlets as well if you can.
So, an inevitable question for some is that since Freezenet is also ad supported, what are we seeing? The answer is that since April 1st, our ad revenue has pretty much plummeted. This in spite of the fact that we are more focused on digital rights issues along with music and video games. It was always going to be unnerving seeing much bigger players hitting the panic button and now we are seeing the knock-on effects ourselves. Unlike Curtis, we have no plans to implement ad block blockers partly because its an insult to our readers and partly because we don’t see them being beneficial to our site to begin with.
Ultimately, our situation right now is seeing the looming pain heading our way and all we can do is sit here and say, “Well, this is gonna hurt.”
While we will do everything to stay afloat, the much broader news related online services is in for some extremely tough times. With some predictions saying that this pandemic is going to last at least a year or more, these next few months are going to be a test for everyone involved in how much financial pain you can endure. If we don’t see site closures, it would be impressive given how some sites have a tendency to operate on the edge of bankruptcy at the best of times. So, buckle in, we are in for a rough year this year.
Drew Wilson on Twitter: @icecube85 and Facebook.
