Web publishers in trouble

From: Wayne Dempsey <wayne_at_pelicanparts.com>
Date: Tue 13 Nov 2001 21:12:43 -0500

Yikes, there certainly are a lot of whiny publishers
around here. As someone who is in the unique role
of being both a publisher, AND an ad-buyer (well, I
guess most publishers buy ads somewhere too), I can
tell you that web publishers are probably in trouble.

Why? Let's consider the market. A few years ago,
the web industry sprang up and created all of these
advertising opportunities and properties. Hmm,
the economy was expanding, but not that quick. All
of a sudden, there are these opportunities to spend
$$$ on on-line advertising. Ad budgets don't just
magically arise out of no-where, they have to take
$$$ away from other sources. So, basically
overnight, there was a glut of available ad
properties. That drove down prices (especially on
the web, but I'm sure it didn't help some magazines,
who have been hurting in the past few years).
The fact of the matter is that the web created a
large supply, and there wasn't enough extra spending
$$$ to accommodate that supply.

In addition, the web-based advertising has the
'disadvantage' of being highly traceable (yes, this
is a huge disadvantage for web-publishers).
Advertising has always been a 'fuzzy' medium - it's
been difficult to track the effectiveness of any
campaign. Surveys, statistics, and how ads affect
the bottom line can be interpreted many, many ways.
When I place a print ad, it's difficult to determine
how that affects my bottom line. I can only guess at
an aggregate picture, or place little 'clues' in my
ad that might generate specific inquiries. This of
course doesn't measure the effect of repeated
branding though.

Anyways, because the web properties can accurately
track response rates, the clients (buyers) are
actually interpreting that most web-advertising is
very ineffective. Now whether this is true or not
is anyone's question, but it's much easier to
justify a print ad in a magazine, when your
click-thru rates are well below 1%. It's tangible,
it's in print, and it's basically immeasurable.
This makes it somewhat more appealing. The buyer
can think that he's getting better exposure.
Besides, a full-page color ad is much better than
a little banner scrawled across the top of the
screen. Most of the time as well, the ad is highly
targeted towards the readers of the magazine as well.

With the glut of advertising space now available, I
think that the industry is due for even more of a
shakeout. The strong will survive, the weaker
won't. That's capitalism at it's best!

Flames are more than welcome!

-Wayne




Received on Tue Nov 13 2001 - 20:12:43 CST