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NONE: ONLINE-ADS>> Re: Modem Media new model

ONLINE-ADS>> Re: Modem Media new model

rhoy_at_tenagra.com
Wed, 25 Sep 1996 09:38:39 -0500

I'm quite surprised that some would embrace Modem Media's philosophy, as it seems to me totally illogical for the majority of us.

For those who don't know, Modem Media is one of the oldest Internet presence companies around. Here is their client list:

AT&T
Coors
Delta Airlines
JCPenny
Mastercard
Pepsi.

What they are proposing will work for their clients, but their clients distinctly different than most of our clients in three ways:

1.) They all have significant funds to create a web site ($100,000's to millions of dollars each).
2.) They are starting with a well established consumer base.
3.) They have major, continuous promotional campaigns on-line and off-line.

That kind of money lets Modem Media build advanced sites with which people will want to interact. The established consumer base means that a percentage of people will always click on a their client's banner ad because of brand loyalty. And the continuous promotional campaigns on-line and off-line means there is additional persuasive force for a consumer to click through.

I suspect that even under the restrictions the Modem Media model imposes, the Yahoos and the C|Nets will still make money with these size clients because of these factors.

Where model breaks down is when you are talking about the small and medium-sized companies, which represent the majority of Internet sites out there. The good sites are often done with a significantly smaller budget, have a narrower base audience, and don't have major continuous promotion. Many sites are just plain crappy because they were done by the MIS staff or using developers with no real experience.

So if this represents the majority of web sites out there, why should Yahoo be held accountable because a site is handicapped either by budget or because it was built by someone who bought "HTML for Dummies" at the local bookstore?

It seems clear to me that one of three things would have be in place in order for advertising-based revenue companies to make money from the rest of us under this model:

1.) Advertisers would have the right to refuse advertising from companies that have crummy web
sites.
2.) Advertisers would have significant involvement in developing content for a sponsor's site.
3.) The price of an ad buy would have to increase.

I think number three is what will likely happen if this model becomes reality for all of us. It is the easiest to implement.

When you are talking about companies that spend more on paper clips than most of us spend on annual operating expenses, raising ad prices isn't a big deal. They are making ad buys so large that there is always room for negotiation and price breaks.

I'd really be interested, however, in hearing how the supporters of this model who don't have "Modem Media-size" ad budgets for a project feel when Yahoo raises its minimum ad buy to $10,000 because they are demanding Yahoo be "accountable."

richard
moderator
online-ads

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