Re: Ouch! - From 60% to 40%

From: Kevin Frazier <kfrazier_at_adace.com>
Date: Fri 19 Jan 2001 14:37:14 -0500

BRENDAN KING <Bking_at_point2.com> WROTE:
> Our advertisers are happy because they are receiving
> value. We are happy because were making money. Our
> site visitors are happy because banner ads are no
> longer annoying but are, in fact, useful to them. I
> don't see Lexus advertising in the back of comic books,
> why the heck is this still happening on web?

Brendan brings up a great point here. Everyone keeps
saying banner advertising is dead. The industry is
saying we need new technology and more bandwidth. Sure
that may offer other compelling formats, but banners
are far from dead. It is the way in which banners have
been used that should be improved upon. Most users
tune out banners because they usually do not match the
site content or don't have any relevancy to the users
needs. As sites scramble to generate revenues they are
lowering CPM's in a desperate attempt to make any money
with their advertising inventory. In doing so, they
are taking ads from anyone willing to pay the low CPM
price point. This is happening on large portals as
well as smaller niche sites. Lowering CPM's isn't the
cure, unless of course the site is so diverse and has a
very general target. Most sites however are attracting
a specific audience and can better increase their
revenues and click-thrus by selling ads that target
that audience. I think we will see a shift in
click-thrus and ad revenues as more site publishers
focus on quality and targeting instead of quantity.
More and more networks are falling by the wayside
because they built their model on mass instead of
focusing on optimization and targeting. I am hoping
this year we will start to see more sites and networks
focus on the targeting capabilities of web advertising.
As advertisements begin to more closely match the
content and user demographics of specific sites, we
will start to see a higher ROI and an increase in CPM,
CPC, and CPA. Banners have very much been like
billboards on the web thus far, but they have a lot
more to offer when used in a way that exploits their
effectiveness.

Kevin Frazier
CEO
AdAce, Inc.
http://www.adace.com
"The first multi-buy ad network for small businesses"





Received on Fri Jan 19 2001 - 13:37:14 CST