NONE: ONLINE-ADS>> Industry Duck and Cover?
ONLINE-ADS>> Industry Duck and Cover?
Leo Sheiner (leo_at_netcomuk.co.uk)
Fri, 2 Oct 1998 05:45:05 -0500 (CDT)
David Scott Carlick" <carlick_at_eyegive.com> writes:
<snip>
>It works as long as there is unsold inventory.
So David is making an assumption here that only remnants
will be sold for CPA since the ROI on a CPA will always be
less than on a CPM or CPC basis. Not necessarily so just
because it has been the case up till now. We have CPA
campaigns running now that are paying more on average
than most CPM and CPC campaigns that we are running.
<snip>
>The first infomercials on television ran on a CPT (cost per
>transaction) or revenue sharing model, using unsold
>television inventory. Over time, that inventory sold out, as
>more and more infomercials began competing for time slots.
>At first, the media sellers would ask for affadavits on
>infomercials to prove their earning potential. Now, to the
>best of my knowledge, all those slots are purchased in
>advance, bid up by infomercial products competing for the
>time slots.
>Same online. We just have an anomoly at present, which is
>that pageviews are growing faster than online budgets.
<snip>
Not so, this is no anomoly but the shape of things to come.
I predicted two years ago that the excess of inventory over
demand was systemic. In other words there are inherent
factors at work that will ensure that this is always the case.
The suggestion here that one day we might have advertisers
fighting over slots as occurred with television is simply not
to understand that the web isn't television.
Television as with other forms of offline publishing has serious
barriers to entry. The web does not. As a result it is possible
for television to create scarcity and indeed monopoly in certain
circumstances, i.e. the exclusive rights to an interview or a
soap that catches the public imagination. I do not believe that
situation will ever prevail on the web for any significant length
of time. There will always be leakage of audience, and always
other options.
The real anomoly is that advertisers have been persuaded to
pay similar rates to those structured in a medium with scarcity
yet operating in a medium where there is glut. What has enabled
that to happen is that such advertisers are used to spending
large sums for branding - a very tenuous and hard to measure
result.
In fact while on the subject of transposing experience from one
medium to another, I am still to be convinced that the latest
fashion of paying exorbitant sums for Portals or potential Portals
makes any kind of economic sense.
A portal consists of a habit that viewers will start at a particular
place. People are making some dangerous assumptions.
People are buying properties on the net as if they are real estate
rather than electronic creations. No-one can replace Madison
Avenue or Park avenue with another street. But a portal is only
as good as its last attraction. I think people may find in time that
they have purchased leaky properties and it will be their dollars
that are leaking.
The laws of supply and demand have not been suspended in
Cyberspace. What is happening here is that the excess supply
is driving down the average price of space. Price reduction
however sucks in more demand as advertising space, even for
those that require a quantifiable result, are achieving the objective
of making a profit. On Safe-Audit we have advertisers who have
been running the same campaign with occasional refreshment of
creative for six months or more. They aren't doing it for fun or
branding but because the equilibrium achieved between supply
and demand gives them a fair ROI. Economics 101.
Buy into 351 million pageviews p.m. on 11,135 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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