Why are online advertisement revenues falling?

The trend has been going on for years and years now. Any publisher, large or small, can see that just getting more traffic, does not mean earning more from ad revenue anymore. In fact, you really need to attract much bigger numbers of traffic to keep your revenue stable.

Why is this happening you might wonder? Isn’t the internet beating television, and aren’t newspapers on their way out?

What’s going on?

At first sight it does indeed not make a lot of sense. The internet’s importance is growing, so why isn’t the money? That’s because the internet is beating its older self as well. The amount of online content has grown enormously, and the competition online is killing. The overcrowded market ad market place is saturated. Ads are shown everywhere, but the publisher get’s less and less money for each impression.

Too many ads

Because most of the ad placement is an automated process, via for example or Google Adsense and Google Adx partners, a ton of ads are placed on websites, including low quality sites. Advertisers know this and are less willing to pay more. Quality publishers like The New York Times will make more money from the ads it sells directly than small Google Adsense Publishers, but even the New York Times has been struggling with ads.

Because publishers are displaying so many extra ads to cover their losses, visitors have felt even more inclined to resort to ad blockers (a huge reason for declining ad revenues, but one that we discuss exclusively here)


We all know it. Mobile is beating Desktop, and this is especially true for the entertainment niche where a lot of younger visitors get their news. Mobile ads are still worth only a fraction of what a desktop ad sells for, as Advertisers are still unwilling to spend much money on mobile ads.

As the above chart shows, 71 procent of time online is now on Mobile. This has a huge impact on ad revenues.

Display is catching up with pay-per-click

Most advertisement revenue used to come from pay-per-click ads, which literally meant that a publisher received money when a visitor clicked on an ad. This was straightforward and made the advertiser willing to pay a little extra. Nowadays Display Ads that are almost shown just as much as pay-per-click, and because the gain for advertisers is much less obvious, they cost less.

There are just a few of the many reasons why this

Why are online advertisement revenues falling?

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