NONE: Business Marketing Internet Advertising Story
Business Marketing Internet Advertising Story
Cliff Kurtzman (cliff.kurtzman_at_tenagra.com)
Fri, 14 Jun 1996 21:50:59 -0600
In the June 1996 issue of Advertising Age's Business Marketing publication,
Jack Edmonston writes a story on web based advertising (page 14) that
provides a lot of interesting information and several statements I thought
would be good discussion topics for this list.
Speaking about web developers, Jack states "So far the only people mining
gold on the Web are those selling the picks and shovels. I have yet to
hear of any Web site that's making money with advertising or subscription
revenue."
Our Year 2000 site <http://www.year2000.com/> has hardly made us
independently weathy, but it does operate at a clear profit (although the
associated discussion list, run by another organization, is not yet
delivering its substantially higher costs of operation -- labor and
computing costs of running active discussion lists can be substantive).
Are there any other examples that people on this list can contribute of
sites making their operational costs through advertising? I don't mean
just the cost of having the page hosted on a server, but also the (labor)
costs of developing and publishing the content calculated at reasonable
labor charge rates. (No one's time is really free, and it should not be
calculated as such.)
The press loves examples and case studies, and I'd love to have more to
offer them than just this one site. I have another content site that is
approaching what I consider to be break even, but it is not quite there
yet.
Jack goes on to state: "Advertising Age said CPMs at major web sites
'generally range from $10 to $80.' (They tend to be much higher on more
specialized business-to-business web sites.)" He mentions ad rates at CMP
publications such as Infomation Week advertise rates of $80/1000
impressions, or a CPM of 80 ["CMPs CPM" -- I love it -- reminds me of my
NASA days]. He also notes that typical CPMs for business-to-business ads
placed in _print_ publications run between $50 and $170.
My feeling is that in order to recommend Web ad buys at rates over a CPM of
about $20, two conditions would have to be met: #1 is that the site on
which the banner is placed would have to be targetted to a narrow audience
of specific interest; hence the viewership of the ad would be heavily
pre-qualified. #2 is that the product or services being promoted through
the ad would have to be a rather high dollar type of product or service.
I'm curious what others think of these kind of rates. Have you found
buyers for ads at CPMs over 30? Would you recommend buys at a CPM of $80
to one of your clients? Is it ridiculous to even try to evaluate such a
thing as a Web ad buy decision with a metric like CPM? I welcome your
perspective.
--Cliff
Cliff Kurtzman
President
The Tenagra Corporation
http://arganet.tenagra.com/
713/480-6300
