NONE: Re: ONLINE-ADS>> Low CPM's Mean Death
Re: ONLINE-ADS>> Low CPM's Mean Death
jgehman_at_creativelabs.com
Thu, 8 Oct 1998 21:53:19 -0500 (CDT)
Scott Southwick <scotty_at_liszt.com> wrote:
>Indeed. The sharply limited amount of quality advertising
>space on the web, compared with the endless number of
>products and services to be advertised, will keep ad rates
>stable for the top-notch publishers.
>I believe that most of us on this group are mostly concerned
>with that finite set of sites and their finite adspaces.
Please get over yourself.
House banners are everywhere. Urban legends postulate that
over 80% of all Web inventory is unsold. From a technical
perspective, the Web inventory is indeed finite.
Practically speaking, the Web has a yield management problem
run amok. The Web is like an airline that doubles its seat
inventory every three months. And guess what--there aren't
enough frequent flyers.
Even *IF* any sites could sell 80% of their inventory month
in and month out, the 20% of inventory that goes unsold
would grow to be a larger and larger number of impressions
(in absolute terms). I have never seen so many bright,
articulate people argue against free market economics. CPMs
are falling and will continue to do so. No matter how much
publishers try to prop up the "currency" with meaningless
arguments like "value" and "quality," the market will
prevail. It's not that the publishers are bad, or that
their content is of no value--to the contrary. Supply
simply outstrips demand by an obscene margin.
Consider:
I have never found a Web site that turned away an I/O. I
have never found a Web site I couldn't turn away.
Until this axiom changes, there is no pricing power, only
pricing pressure. Once one of the big portals finds the
gospel of yield management, CPMs will face a severe
whiplash, followed by a wave of publisher consolidation.
===========================
Joel Gehman, Internet Marketing Analyst
mailto:jgehman_at_creativelabs.com
408-428-6600 x6904
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