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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.
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]
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.
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.
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.
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.
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.
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?)
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?