NONE: ONLINE-ADS>> Banner Exchanges: Not a Bad Idea . . . if targetting
ONLINE-ADS>> Banner Exchanges: Not a Bad Idea . . . if targetting
online-ads_at_o-a.com
Thu, 20 Feb 1997 18:47:19 -0800
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Sender: owner-online-ads_at_o-a.com
Precedence: bulk
Okay, I guess it's time for me to jump into the debate about "banner
exchange" networks (like Internet Link Exchange). I currently have a
pretty dreadful click-through ratio of 150:1 (or 0.66 percent) for my
current BUSINESS banner (you can view my stats at
http://cgi.linkexchange.com/cgi-bin/pubstats.exe?X963477).
I happen to think that untargetted Banner Exchanges, like any untargetted
advertising, is a "bad idea" because you are wasting huge amounts of
traffic by displaying ads to people who are 100% uninterested in what you
are offering. For example, my current ILE banner is for a directory page
of estate planning & probate attorneys. I won't draw any traffic from
teens, or (probably) from people who are just surfing for fun.
But I continue to participate in several link exchanges because I know
what's coming: targetted banner displays. I already know some results: one
of my banners, which got only about a 1% click-through rate through ILE,
draws a 3% click-through rate on the "Banner HotSwap" (Christian-theme)
banner exchange network, to promote a page about Christian music artist
Michael W. Smith. As targetting improves (e.g. if I could target that page
just to Christian MUSIC sites), results will also improve for everyone.
I strongly believe that the ad networks that succeed -- whether on a paid
or exchange basis -- absolutely must spend huge amounts of energy on
adopting useful and effective targetting. This requires some more complex
registration -- for example, each web page probably must be separately
registered and assigned to categories, and the ad network must budget staff
time to confirm proper assignment of categories for each site or page.
If targetted ads are to be effectively sold, then I also believe that ad
networks must work to drive down the transaction costs for making small ad
purchases. If I want to buy all available impressions on financial
planning web sites in a network, that might only be 10,000 impressions per
month, and for small purchases like that, it is absolutely essential that
the purchase not require 5 hours of staff time for the ad network to
implement.
I strongly believe in the narrowest, most precise categorization possible.
Thus, the categories used by Banner Media are more attractive to me than
the smaller group of categories used by Commonwealth Network, or the
handful of categories used by some other vendors. Someone suggested that
it might even make sense to go ahead and implement several parallel
category systems within a network, so that each site is categorized with
SIC codes plus SRDS categories plus several other systems. Then an
advertiser can select the system that is most suited to that advertiser's
needs.
There is another issue looming, in my opinion: ad rates for untargetted or
broad-category ads are going to head downward, probably well below the $10
CPM rate (e.g. below one cent per impression at "retail"). As that
happens, I would expect the inventory of "untargetted" space to shrink (or
grow more slowly) because a web publisher can't pay the bills at those
rates. The way to deal with that is NOT necessarily to reduce the rates
paid to web publishers -- a better solution is to optimize the categories
and provide targetted ad placements that increase the value to all parties.
It's important to recognize, too, that as general ad networks like ILE
implement targetted banner exchanges, they will probably supplant (or
acquire or merge with) the current single-theme banner networks. That's
because in a general-purpose network, I can accrue ads in one category but
display them in another (e.g. I could accrue ad impressions on my "web
advertising" page and apply them to promote my estate planning site). As
this moves forward, it may turn out that the ad network will need to assign
different relative values to different categories -- e.g., instead of
accruing 0.5 credits per impression across an entire network, an ad
impression on a financial planning site might be worth 1.2 credits while an
impression on "Bob & Theo's Excellent Home Page" might earn only 0.3
credits -- all adjusted dynamically based on supply & demand (and also
based on the demand from paying customers, with some assigned dollar value
for accrued credits).
I note that some of the "paid" ad networks/brokers are adopting an
"exchange" element within their networks (Web Wide Media announced this
move this week), and I think that ultimately, every (surviving) ad network
will merge the notions of "paid" and "exchange" into a single network model.
___________________
Mark J. Welch (510) 847-2026 http://www.ca-probate.com/
Web Ad Networks & Brokers: http://www.ca-probate.com/comm_net.htm
Banner Ad Server Software: http://www.ca-probate.com/ad_sw.htm
Public Service Banner Ads: http://www.ca-probate.com/psa_bann.htm
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