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Web Ad Broker Networks Under Pressure
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msg:3776074
 6:16 pm on Oct 29, 2008 (gmt 0)

Web Ad Broker Networks [online.wsj.com]Under Pressure
More than 300 online-ad networks have cropped up over the past couple of years, making the business of brokering ads on the Web one of the most popular -- and crowded -- niches on the Internet.

But with the nation's economic woes deepening, there are signs of a shakeout as growth in online spending starts to slow and venture-capital funding begins to dry up.

But as the climate has soured, network executives say many ad deals in the pipeline have been reduced or pulled. Tight wallets have forced ad agencies to get tough, even canceling ad deals to get a better rate.


 

skibum




msg:3776199
 8:45 pm on Oct 29, 2008 (gmt 0)

Could it be because display advertising online does not work at least the way it is usually done? The stats and studies that show it does always include the view-through conversions (which they usually neglect to mention) and since they are often behaviorally targeted in many cases, they are shown to people who have already been to the site and would purchase anyway. It's like the BHO cookie cannons affiliates used to use all the time. Setup a campaign on an ad network, set it to show ads to people who have been to the site but not purchased and take credit for view through conversions even if the "view" was associated with an ad at the bottom of the page the person never saw.

All the major online publications are full of press releases from the ad serving and media companies and agencies extolling the virtues of banner advertising based on bogus data created to sell more media. These are the articles by all the "experts".

[edited by: skibum at 9:48 pm (utc) on Oct. 30, 2008]

frontpage




msg:3776302
 10:55 pm on Oct 29, 2008 (gmt 0)

I don't know about anyone else here, but I nor any of my immediate family have ever made a purchase through clicking an Adword ad.

Banner ads are so 1990's.

I think that other subtle forms of advertising are more effective such as product mentions in blogs, news articles, forums, etc.

I tend to be an early product adapter and find most of the gems that I eventually purchase via casual banter on forums.

jcoronella




msg:3776368
 1:34 am on Oct 30, 2008 (gmt 0)

Anyone doing arbitrage should be careful. When your network files chapter 11, you may be getting paid only 10% of what is owed.

In this economy, I'd stick with networks that you know will pay.

This isn't just banner networks. Super-affiliate networks, widget networks, alternative contextual networks, etc. They are a dime a dozen and some are bound to fall.

himalayaswater




msg:3776463
 6:50 am on Oct 30, 2008 (gmt 0)

Banner ads are so 1990's.

Yes, they are but they trends to pay best. While adsense pays .5 cents, CPM ad pay anywhere between $6 to $50 per 1000 impressions. It is quite popular among the large ad spenders and top 1000 brands.

devil_dog




msg:3776734
 2:38 pm on Oct 30, 2008 (gmt 0)

I nor any of my immediate family have ever made a purchase through clicking an Adword ad.

Either you are wise enough to differenciate between adsense and regular editorial link .... or you still havent realised it.

People who run websites know their effectiveness.

You may not have clicked thru an ad, but if the banner ad is about a known brand and its graphical, to some extent, the impression will have an sub-concious effect on you.

dingloo




msg:3777059
 8:21 pm on Oct 30, 2008 (gmt 0)

devil_dog, you are sooo right. I have seen Coke and McDonalds pay websites just to show their brand names in front of the right target audience. My six year old son can identify the big M symbol anywhere anytime, and I am sure it is the same case with any toddler/kid in the US. This is primarily achieved by making sure the brand name sticks in front of your eyes all the time. Coke has the same formula where we know the Bright Red color with a bottle in the middle - it is synonymous to Coke.

I am hoping one good thing to happen at the end of this - all the small adnetworks will either vanish or get bought out by the better ones. The ones that will survive this will be the ones who have a niche customer base for themselves.

Lets wait and see.

jhood




msg:3777230
 2:46 am on Oct 31, 2008 (gmt 0)

While adsense pays .5 cents, CPM ad pay anywhere between $6 to $50 per 1000 impressions. It is quite popular among the large ad spenders and top 1000 brands

This is simply incorrect.

AdSense pays a lot more than .5 cents CPM, even a lot more than 5 cents CPM in many sectors, niches and situations. I don't know any of -- repeat, any -- ad network that pays anything even remotely approaching "$6 to $50" CPM for display ads.

johnser




msg:3777562
 4:25 pm on Oct 31, 2008 (gmt 0)

I know an insurance company with a decent brand-name.

Their CPA is only slightly more expensive on banners than search - both are optimized to the max....

Hugene




msg:3777626
 5:49 pm on Oct 31, 2008 (gmt 0)

Banner ads are about building brand recognition and that's something that is hard to measure, takes years of steady investment, yet works like hell: case in point Coca Cola, McDies, and thousands others. So there will always be a market for banner ads. People don't even need to click on them for them to be effective.

signor_john




msg:3782262
 9:19 pm on Nov 7, 2008 (gmt 0)

I saw a presentation just the other day that discussed the synergy of display and search ads. The research data indicated greater "lift" from a combination of both (which makes sense, if the search ads are promoting brand-name offers).

FWIW, my site is represented by a vertical display-ad network that's doing quite well. CPMs have been climbing, even in the current ad environment. Sure, there may be a shakeout, but that doesn't mean ad networks or display ads are dead: It simply means that some ad networks and their member Web sites are doing a better job of serving advertisers than others are. (Does anyone here seriously believe that there's a need for hundreds of ad networks?)

skibum




msg:3792587
 8:51 pm on Nov 23, 2008 (gmt 0)

Banner ads are about building brand recognition and that's something that is hard to measure, takes years of steady investment, yet works like hell: case in point Coca Cola, McDies, and thousands others.

On TV & other traditional media, yes. On the web there are lots of studies that lead to the same conclusion but on the web a person is in a much different mindset. They are actively looking for or doing something, not sitting back taking in the entertainment and commercials as they are on TV or when browsing through a magazine. Is there even one study out there on the effects of banner advertising that is not put out by a media company or adserving company that shows in some way that banner advertising works and clearly lays out the metrics used to arrive at the conclusion?

I saw a presentation just the other day that discussed the synergy of display and search ads. The research data indicated greater "lift" from a combination of both (which makes sense, if the search ads are promoting brand-name offers).

There are lots of those. What defined lift, was there anything that showed an increase in sales? Did they define the requirements for a banner ad to get credit for driving sales (someone seeing the ad/vs clicking on the ad)? Did they address how the overlap between view through conversions for banners were reconciled with the click-through data from search?

It would be interesting to see how the results of these "studies" change in a declining economy. When online sales for most any company were going up the last 10 years or so, its pretty easy to "show" banners or almost anything for that matter contribute to growing sales and for people to believe it and spend money on it.

Based on click-through measurements, most banner programs I've seen generate about $1.00-$3.00 in click-through sales for every ten dollars spent on media. In most cases, they are also targeted to people who have already been to the merchant site so are already inclined to by anyway.

FWIW, my site is represented by a vertical display-ad network that's doing quite well.

How is "doing quite well" defined? Is that sales being generated on your site such that sales revenue is greater than ad spend or is the site the publisher seeing decent CPMs?

There is definitely some value in banner ads but does it justify the cost?

fearlessrick




msg:3795050
 1:58 am on Nov 27, 2008 (gmt 0)

I get between .40 and .80 per 1000 with banners, squares and skyscrapers individually, which is why I like to run one of each on every page. The roughly 1.50 cpm is a base. If you get 100,000 page views a day (I don't yet), you're making $150 without lifting a finger. Traffic is the key. And the only way to get traffic is? I'm sure there are lots of answers to that question, but the traffic X CPM = $$$ formula is one which always works to some degree.

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