by John Jorgensen on November 25, 2008
- AdBrite CEO Iggy Fanlo predicts that within 6 months, half of their ad inventory will be sold on a cost-per-click (CPC) basis instead of cost-per-impression (CPM).
- AdBrite serves 25 BILLION ad impressions per month across 85,000 sites. Average CPM is between 50 cents and $2.
- This isn’t surprising. CPM ads have been generally looked upon to serve a brand awareness function, creating an ROI that is near impossible to track. Direct-response CPC is much more straightforward.
- AdBrite laid off 40% of their staff in October.
TC
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by John Jorgensen on November 12, 2008
- Nick Denton of Gawker Media, whose predictions for the display ad industry have been an optimistic ray of sunshine pessimistic to say the least, has posted another article on his blog detailing just how far the sky might fall.
- Denton recommends executives should plan for a 40% decline in advertising spending.
- Denton says that current estimates for display ad growth (J.P Morgan projects a change in growth from 16% to 6%) don’t take into account the deep recession that the US is facing. According to a report by a Morgan Stanley analyst, US advertising spending is tied to GDP growth on a 3x multiplier (if GDP goes down 1%, ad spending goes down 3%).
- Denton’s advice to publishers:
- Stay in categories that marketers like, and get out of categories like politics.
- Renegotiate contracts with hosting and hardware providers.
- If you have multiple properties, hold on to the ones that make the most revenue and ditch the others (80/20 rule).
- Offshore if possible.
- Reduce salary compensation, increase profit sharing.
- Monetize your site’s real estate to the max. Introduce bigger ad units.
ND
by John Jorgensen on November 10, 2008
- T-Mobile has agreed to buy 1 billion impressions on AOL’s Platform A ad network over today and tomorrow for somewhere between $1 – 1.5 million to tout Google’s G1 phone.
- Works out to a CPM of between $1.00 to $1.50, with the smart money on somewhere inbetween $1.00 and $1.10.
- Great grab for AOL who saw ad revenue drop 6% last quarter.
- Maybe display advertising isn’t dead… when it’s done in bulk.
- AOL: wash, rinse, repeat.
All Things Digital
by John Jorgensen on October 14, 2008
- Nielsen, co-founder of the Nielsen/Norman Group that has done extensive web marketing effectiveness research all the way down to eye-ball tracking, has stated that people simply don’t look at display ads online.
“We call this banner blindness — people won’t see ads at all,” said Nielsen. “Ads might as well not exist as far as users are concerned, except for search ads.”
More great news for the advertising industry which is already seeing estimates slashed. For those unfamiliar with Jakob Nielsen, he is a web usability god. Check out his column, Alertbox. So what’s the next big advertising model?
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