Weathering The Ad Storm - For How Long?

Calling all crystal balls - predictions please.

[Drastic]

I think we all can agree we are in an ad slump of some sort. Whether it's low rates, poor delivery, bad delivery vehicles, sorry business models, or whatever - there is a problem. But, it can't last forever. My question, and hopefully ensuing discussion, is how long, and why?

A while back in one of these threads, I predicted we would see some turnaround in the third quarter this year. (Not a recovery, a start of the turnaround.) Though that may be a little on the optimistic/early side, I will stick by what I already guesstimated.

Why? Poor business models and poor ad vehicles will start being corrected in the 2nd quarter (this year), and be even more of a factor in the third quarter. Though it takes a while for the positives to trickle down to the independent publisher, I think we will feel some recovery effects mid to late third quarter.

I think, and part of this is "hopeful" bleeding over into "think", we will be in a full-swing to recovery by end of the year. By this time, I think a majority of the bad business models will be gone, and new, better-working delivery methods will be widespread and accepted, allowing more ad sales at better rates.

What does your crystal ball tell you?

[rcjordan]

On the whole, in the US I think we are more dependent on the stock market and the economy than we'd like to believe. With the current trendlines tipping towards recession and the rather grim realities still facing the net stocks in particular, I don't think we're going to see a significant rebound this year. Q1 Results Show Shakeout Just Starting [internetstockreport.com]. As with any other industry, there will be some that serve niche markets who might even do well. But, those aside, the shakeout continues.

[Xoc]

I don't think this is a slump. I think that web savvy users have learned that ad banners are worse than useless to click on, so have come to ignore them.

Even if ad clickthroughs increase in the future, what makes you think that ad companies will be elastic about passing ad revenue on to you?

[Brett_Tabke]

Amid all the doom and gloom, there are a couple of bright spots. They say there are Coke ads now running on AOL and Yahoo. That marks the first time for a traditional major offline advertiser to foray onto the net.

However; I tend to agree, the banner ad is dead. There is no hope of a comeback for banners. It is pennies down the line. They say even yahoo has fallen to $7 cpm with name your category. I bet we see the $1 banner on Yahoo before the end of summer.

[gmiller]

For the past few weeks, my ad rates via Burst! have been rapidly improving. Right now, I'm only running about 25% below where I was a year ago.

> Even if ad clickthroughs increase in the future, what makes you think that ad companies will be elastic about passing ad revenue on to you?

Typically, they pay a percentage of what they get from the advertiser. Some of the smaller companies pay a fixed rate, but those companies are very vulnerable to bankruptcy in any sort of downturn.

[rcjordan]

My ad rate via Engage bottomed out in Nov/Dec 2000 and has trickled up since then. It's better than chasing CPA deals, that's for sure.