NONE: ONLINE-ADS>> The future of web advertising?
ONLINE-ADS>> The future of web advertising?
Leo Sheiner (leo_at_netcomuk.co.uk)
Wed, 17 Jun 1998 11:55:47 +0100
There is an interesting article from which I extract a couple of
salient parapraphs below. The full article is at:
http://www.zdnet.com/anchordesk/story/story_2172.html
I have a lot of respect for Jessie Berst as a jounalist but he is a
little inclined to be sensationalist (aren't all journalists <g>) and
sometimes I wonder at how fast he is to jump to the wrong
conclusions. I remember well his article which can be summarised
as "I have seen the future and it is called Push". :) Below the
paragraphs are my comments and I would be interested what
others think.
>"There's a glut of ad inventory on the Web right now,
coupled with a shortage of good ways to measure the
audience (click for full story). As we solve those
problems, Web advertisers will do what TV and print
advertisers have always done. They will gravitate toward
quality, not quantity. Toward the best sites that can
deliver the best audience. Sites that switch to
pay-per-click exclusively will go out of business.
>Pay-per-click will exist on the Web, but only as one of
several advertising models. Quality media and quality
products won't use it as their primary ad vehicle. For
the same reason you are pummeled by call right now!
ads on late-night cable shows. But never on prime-time
TV.
Pay per click is of course very much my territory because
that is why I founded Safe-Audit. Jessie begins "There's a
glut of ad inventory on the Web right now". The implication is
that this is a passing phase and that at some unspecified time
in the future this will reverse itself and glut may become
famine? Wishfull thinking. I predicted this state of affairs at
least eighteen months ago. With no barrier to entry and an
ever expanding volume of content on the web, a glut of ad
inventory is systemic. Its here to stay and indeed increase.
I have always said that web advertising is a buyers market.
Many here on this list may wish it were otherwise but unless
you own (and can keep hold of) a very special niche of content
the value of your traffic is under threat from the laws of supply
and demand.
Then he states "Web advertisers will do what TV and print
advertisers have always done".How can someone justify
that assumption? Perhaps it is wishful thinking, perhaps this
new environment will make advertisers do some different?
In general it is quantity and price that drives out quality, not the
other way round. A savvy advertiser will look to his bottom line.
He will analyse his cost per action (whatever action he wishes
to have happen - anything from a sale to a higher awareness).
He will look at his ROI. The rest is all commentary.
If I am an advertiser what do I care if my CTR is 5% or .005% or
anything in between, it is the relationship between cost and results
that is the only metric that ultimately counts. And if my cost CPM
is 10 cents or $100 who cares as long as my cost per action
provides a satisfactory return on my investment. The point I am
making here is why would I pay $1 a time to get a 10% response
if I could pay 1 cent a time to get a 1% response.
Targeting is all well and good but the price differential is what
makes it attractive or not and if the relatively untargeted traffic
costs less then it must also impact the value of the targeted traffic.
The only time that isn't true is if there is no way to reach any
significant percentage of my target market at the lower cost. I.E.
if the expensive targeted traffic is so unique that I cannot reach
them any other way.
My last comment is in respect of "Sites that switch to pay-per-click
exclusively will go out of business". This comment must be inspired
by the fact that generally click deals generate less income than
exposure ones. That is probably because the closer you get to
paying directly per action, the more accountable you are for the real
value of your traffic. Where supply will always exceed demand that
accountability will be a fact of life for an increasing proportion of
providers of traffic.
I think that should probably read Sites that depend on Ad revenue
exclusively will go out of business. At Safe the majority of our host
sites either do not depend on revenue at all or if they do it is only
part of their revenue. And this is key. No business can compete
for long against other with similar capabilities but that have additional
independant sources of revenue or are non-profit organisations
assuming of course that it is a buyers market.
If content and traffic increases faster than the need to address that
traffic then the cost will fall. Simple really.
Buy into 211 million pageviews p.m. on 5,171 host sites to gain
the results you want. Free consultancy and animated banners
Why advertise using Safe? http://safe-audit.com/adpromo.html
Why host banners for Safe? http://safe-audit.com/hostpromo.html
mailto:leo_at_global-m.com Telephone +44181 346 0770 Leo
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