Causes of declining banner ad rates (was Re: Interesting article)
BRANDI JASMINE <brandi_at_brandijasmine.com> WROTE:
> This is something I just can't wrap my mind around.
> Overall the business is *growing* yet rates are dropping
> - to the point where small sites like me, with 200,000
> page-views can't even supplement an individual income
> through advertising. Just where is all this money being
> spent?
TO WHICH LEON MERGEN REPLIED:
>A big part of that money is spent on the big sites...
>Like Yahoo...
>They charge insane rates, but still companies advertise...
The glut of inventory creates the largest downward
pressure. The one commodity which is guaranteed to
continue increasing on the Internet is surf traffic.
Sites are constantly working to build up their traffic.
The more unique visitors or page views they have, the
better their inventory looks. But everyone is looking
for more traffic.
Sites like Yahoo! may charge high rates, but they are
generating 10s of millions of visitors and page views.
There aren't that many sites which can charge such
high rates. Everyone else is vying for the advertising
dollar.
We've got four types of revenue streams to work with:
1) Advertising income
2) Sales income (divided into commission referrals and
direct sales of products and services)
3) Subscription income (people pay for access to content
or services)
4) Contribution income (probably negligible, but Amazon
is encouraging sites to develop it)
Recent research suggests that most of the companies
making money on the Internet are doing so by focusing on
sales income. But a lot of sites are still trying to generate advertising income and now subscription
income. The competition for advertising and subscription is going to be
fierce enough that few people will be able to survive on it for long.
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 Fri Jun 01 2001 - 10:35:05 CDT
