NONE: Re: ONLINE-ADS>> Ad Banner Campaign Jam
Re: ONLINE-ADS>> Ad Banner Campaign Jam
Joel Gehman (jgehman_at_creativelabs.com)
Fri, 7 Aug 1998 10:35:55 -0500 (CDT)
Jennifer:
In my experience, your cost per click objectives are *very* reasonable.
However, 10% click-thrus are well above the 1-2% averages for the industry
and I would expect you must be offering something free, time-based or are
tricking your audience out-right to get that kind of click-thru. (In the
case of the latter, they are likely leaving your site as soon as they get
there, so you need to ask if your cost per click metric is really capturing
their true behavior.) I would suggest that 10% is not sustainable, so if
you want your bonus, look at CPMs....
As for your CPMs, unless you are making an *extremely* targeted ad buy (or
are only buying 100K impressions at a shot), they are way too high. We
have been hearing reports that as much as 80% of search engine banner
inventory is un-sold. We are currently way south of $10 CPM on
average--these are all for content/branded sites. I've had offers in the
last week for as little as $1.50 cpm for a search engine (one of the top
four). I have several sites at $3-$7 CPMs. I even have C|NET and other
premium content brands in my media mix. In October of last year our
average CPM for basically the same sites was closer to $30.
The point is, CPMs are falling and will continue to fall. If Yahoo's page
views are up 600% in a quarter, and they cut their CPMs in half, their
revenue still triples--assuming they sell the same percentage of inventory.
The Industry Standard had a quick graph in the 6/29 issue showing just
this--as page views have gone up, CPMs have gone down. As of 3/98, they
claim the average CPM industry-wide to be around $36.50. The law of
averages tells us that 70% of the population is below the average.
Now, all of what I'm saying will be a big barb to those selling ad space,
but these are the facts. I expect someday we'll be buying impressions by
the 100K or the million, not the thousand--because CPMs are going to go
below $1--probably this year for many sites.
The flip side to all the growth is a new phenomena--page views at some
sites are actually shrinking (ie, InfoSeek and C|NET, according to their
most recent quarterly filings). At the same time, page views web-wide are
still growing exponentially. What's happening? We are seeing a massive
fragmenting of voice. Just as TV has gone from 3 networks to 5 to a few
dozen cable station to DSS and 100's of channels with no one being able to
command a large share of eyeballs, so too, the Web is fragmenting. There
are so many ways to reach the same eyeballs on the Web. While every vendor
*claims* their eyeballs are better than another site's, there is no proof.
OK, so I could go on about how the online media vendors are their own worst
enemy, because they've done nothing to help media planners calculate reach,
frequency, average frequency, unduplicated reach accross a media plan. If
I buy 2 million impressions on C|NET and a one-page ad in PC Magazine,
what's my total reach? No one has a clue--_at_plan is the closest
organization to being able to answer this and they are still a ways off.
Right now, there is no way to differentiate. Banners are a commodity.
The inventory is perishable, so the buyer has the upper-hand. I can
always wait, during which time, the unsold inventory was wasted. This all
leads to tremendous pricing pressure. The pressure won't stop anytime
soon...
Happy buying,
Joel Gehman
Internet Marketing Analyst
Creative Labs
http://www.soundblaster.com
mailto:jgehman_at_creativelabs.com
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