europeforvisitors - 3:30 pm on Apr 19, 2006 (gmt 0)

Perhaps the offline advertising world has it wrong, their empires do seem to be fading.

Not really. Magazines and other offline media that can deliver quality targeted audiences continue to do extremely well. For example, CAR AND DRIVER's ad revenues grew nearly 25% in 2005, HOT ROD's revenues grew nearly 39%, and BOATING was up 16%.

The higher CPMs there could easily be driven by the brand-building prestige of being associated with the higher quality content and if there were a way to actually measure the "click-through" offline the model would collapse entirely.

Actually, there's a very simple way to to measure "clickthrough rates" in offline media: Just divide the number of responses by circulation. But it's a mistake to assume that response rates are the sole measure of advertising success. Ads are run for any number of reasons, such as building brand awareness so that--for example--the person who's planning a vacation will go to Expedia.com or the person who's thinking about a new vehicle will test-drive a Ford Explorer.

Direct-response advertising is merely a niche within the advertising industry, which is one reason why AdSense now offers site-targeted CPM ads in addition to contextual ads. And one of the big research firms recently predicted that online display ads are poised for greater growth than text ads are. (I've seen a big increase in display-ad revenues on my own site lately, with most of the ads coming from big-name corporate advertisers.)