Error 402: You Will Click On Internet Ads, Oh So Many Internet Ads

Last week in our Error 402 series on the history of web monetization, we covered how early paywalls for content almost universally failed. We'll explore a bit more of the why later, but first we need to talk about internet ads. Because they basically sucked up all of the oxygen in the online monetization world. As this series pretty clearly notes, when the early web was being developed, the very fact that a 402 Payment Required" status code was created and was slotted in before things like the much more well known 403 Forbidden" and 404 Not Found" shows that it was intended to be a core part of the web.

But that pretty much completely fell by the wayside. I find it somewhat hilarious that 402, which dates back to some of the earliest days of the web, is still described as experimental" and reserved for future use."

It's quite likely that a big part of the reason it was never really developed or standardized is that online ads basically changed everything when it came to funding content. And, yes, I know that everyone hates internet ads. I hate internet ads. But to understand this series, we need to explore internet ads and what happened with them.

The first web ad is generally credited to Hotwired (the online entity created by Wired magazine), which had the first banner ad (for AT&T!) in 1994. It played off of AT&T's famed You Will" marketing campaign in the early 1990s, in which Tom Selleck (!!) narrated TV commercials describing future things AT&T thought you'd be able to do (mostly online) as the technology got better. As Tim Lee noted a few years back, those ads were... actually amazingly accurate in retrospect:

And, in some ways, that very first banner ad was kind of prescient as well. Have you ever clicked your mouse right HERE?" it asked? You will."

And while many of you will likely deny ever clicking banner ads, many, many people did. And, suddenly, money flowed. Content sites proliferated, as did banner ads. Of course, the actual performance of banner ads was mixed. The first one performed incredibly well. Perhaps because it was first. But also, as the guy who created it at the ad company admitted years later, it was actually part of a more thoughtful integrated marketing campaign, rather than just a random banner ad:

Almost 20 years ago, on 27 October 27, 1994, the first banner went live on hotwired.com. For over four months, 44% of those who saw it clicked on it.

Because I wrote that banner, I'm often asked why it worked so much better than today's banners, which get clicked by only four out of every 10,000 people who see them. Expressed another way, why did that first banner generate more clicks with 10 impressions than the average banner today generates with 10,000? What have we done to destroy one of the most effective forms of advertising ever invented?

As you'll see, that first banner had three advantages over modern digital ads: it was part of an integrated marketing campaign; it was a great experience (as opposed to being a mere message); and it was created with only good intentions toward consumers.

Rather than going back and more deeply exploring other monetization approaches, the focus started to turn to how to make more people click on ads. The incredible 44% click through rate on the first ad set up some ridiculously lofty aspirations which did not hold up. At all. But rather than exploring all that, people just moved on to experimenting with more annoying ways to get clicks, with the most annoying of all being the pop-up ad.

Ethan Zuckerman, who has spent many years trying to make the web a much better place (his projects are really cool), has also spent many years apologizing for creating the first pop up ad. How many of his modern really cool projects are penance for that earlier mistake... well, we'll never know for sure.

To be honest, I find it amusing that so many of the pioneers in online advertising have gone on to try to make amends for their role in shaping an ad-dominated webscape. Beyond Zuckerman's work, Andrew Anker, who was CTO at Wired and CEO of Hotwired when that first ad debuted, spent years trying to explore other forms of online monetization, including founding a company called Tugboat Yards that created what might be thought of as a (too early) Substack-like setup (which was eventually purchased by Facebook). But part of his thinking in creating Tugboat Yards was to try to help publishers make money in a manner that didn't rely on the very internet ads he'd help invent.

Similarly, Brendan Eich, who created JavaScript and is sometimes blamed for building the enabling technology that allowed folks like Zuckerman to load up the internet with pop ups (and pop unders), eventually went on to found Brave, the web browser that tries to limits ads while also experimenting with monetization alternatives for sites.

But, for all of those later decisions to try to move the web content away from just advertising-based business models, none of that really mattered for the vast majority of the web, which became inundated with ads... in part because of the evolution we'll discuss in next week's entry in the series: the rise of Google and search ads.