RE: The potential of banner ads

From: Michael Martinez <Michael_at_xenite.org>
Date: Mon 14 May 2001 14:35:45 -0500

JOHN GASKILL <jg_at_info-central-usa.com> WROTE:

>Oil companies learned during the gas wars of the
>1960's that gasoline was actually price elastic,
>that is, when the price is lower, people use more
>of it (the "quantity demanded increases").

TO WHICH ALEX CHUDNOVSKY <alexc_at_jungle.com> REPLIED:

>Ok, I must admit my Economics course was quite a few \
>years ago from now (and I often skipped it in favour of
>CS related disciplines), but I am pretty sure that
>Gasoline (petrol) is one of the examples of NOT elastic
>products. Despite price hikes consumers do not stop
>using it. That's why all governments love to tax the
>hell out of it -- it guaranteed cashflow.

Gasoline taxes in the United States are miniscule
compared to the taxes in Europe. The Europeans set
out to curb consumer use of gasoline and they did a
pretty good job. They are less dependent upon it than
we are.

But if the argument here is that banner ad rates are
elastic, well, what research supports that?

I just posted a message to the list, which I guess will
be reposted in the digest in about 8 or 9 days, that
cites a just-released report from DoubleClick which
argues that banners are effective in branding if the
exposures are frequent enough (4 to 8 per user). If
that is the case, and if banner ad rates are price-
elastic, then branding will become the next big thing
(again) in banner advertising, because right now, there
is a huge glut of inventory.

I saw another report tonight indicating that the ad
revenues remain strong overall but that more of them
are now coming from offline companies than from dot-coms.
I suspect that traditional media advertisers are now going
to test the branding waters, and we're doomed to another
month or two of PRO- and CON- branding arguments.
<grimace>

Okay, I still read the branding discussions now and
again, but I'd really like to see some hard data in place
of all the definition wars.

Michael Martinez
 Science Fiction and Fantasy info_at_xenite.org
  Visualizing Middle-earth, a book for all Tolkien fans
   http://www.xenite.org/



Received on Mon May 14 2001 - 14:35:45 CDT