NONE: Re: ONLINE-ADS>> Ad Banner Campaign Jam
Re: ONLINE-ADS>> Ad Banner Campaign Jam
Mark Surfas (Mark_at_criticalmass.com)
Tue, 11 Aug 1998 06:58:20 -0500 (CDT)
At 10:35 AM 8/7/98 -0500, Joel Gehman wrote:
>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.
Joel raises many really excellent points and I'd like to comment on the CPM
issues he has raised.
I believe Joel is correct, CPM is in a freefall but I don't believe this
freefall will last forever as he has indicated. Quality targeted sites
have costs. Joel holds up search engines as a shining example of a site
that will scale, drop prices and still see fat increases in revenue. That's
terrific until the search engines have no place to send anyone except
geocities and tripod due to lack of revenues for content sites. No flames
for that please, it's a gross generalization.
Joel has done an excellent job of buying media at an aggressive price,
however I for one have turned down RFP's from Creative as they are *below
my cost* of creating and hosting my content. I have no need to subsidize
Joels next raise if my sales force is competent and able to sell against
the competition. As much as I would dearly love Creatives business and as
much as I believe my audience (game players) is Creatives market, we intend
to be in business next year.
One trend that I see is that if CPM's are too low, sites would rather do
merchandising deals where they run their own creative to sell their own
co-branded products or commissionable products. In other words, If I
believe my audience is the right audience for Creative I'd rather sell
their products and take a cut than run unprofitable banners. I do this now
and it has worked *extremely* well for us.
Search engines and portals are great starting points but at this time do
not have the credibility that a targeted content site has. By working
with advertisors we have delivered far greater per view value than what I
believe a search engine ever will.
I still want your business Joel. :)
Mark Surfas
<Mark_at_criticalmass.com>
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