There is a bit of a feeling that advertising on web sites, much like SEO, is a bit of snake oil business....I agree with the op's statement-- when have you bought anything from a web advertisement anywhere? Maybe you have signed up for a service from one? But bought something? Even something very targeted.... although it does seem that "paid placement" in search -- (google search advertising) does provide some sales... Dvorak has been calling this out for some time.... advertisers seem to be catching up.
I think the irony is that the ability to see a path from view->CTR->action has severely devalued online advertising even though the theory behind it is no different from other, less introspectable forms of advertising.
In other forms of advertising, the advertisor is forced to confront the fact that the connection between advertising and purchasing is not a direct process because they can't see it anyways. They can see that they advertise and somewhere down the line they can observe a general rise in sales or brand knowledge, but they can almost never tie that to even a campaign, let alone a particular impression.
So you have this market for advertising where the advertisers can point to abysmal CTRs and say "See? I shouldn't be paying this much for such terrible action!" while still reaping the benefits of less tangible brand recognition down the road. And thus is born a race to the bottom.
Something that shouldn't be ignored is how many publishers have burned themselves by taking advantage of the technical aspects of online publishing to sell dozens of ads where print media would have sold one. It's enough to compare a magazine article to its online edition. The magazine edition might have four ads if the article spans three pages. Online, the article will span 10 with half a dozen ads on each page. These animated, aggressive ads will vie for the readers eye to the point that they will start using ad blocking software just to be able to actually read the article.
Yes, but those publishers are getting dimes, nay, pennies, compared to the print ad revenue (should say "were" in terms of print).
Publishers did not burn themselves. They were desperate for survival. If they only ran, say 3 banners through an online article they would have simply been out of business. There was nowhere else to turn for many of them as the advertising disappeared. Evolution.
You could also make the argument that publishers are getting pennies for those ads because they're running thirty of them on a page. I've done tons of ad work online, many specs have limits on how taxing the ads can be for the end user's computer not because they don't want to degrade the experience, but so they can run 10 ads on a page at once.
