Online Advertising takes a hit
In a recent article on ReadWriteWeb.com, Josh Catone describes the data from a study by PubMatic that shows online ad prices are coming down.
The report found that ad prices (based on effective CPMs) in April across all sites fell an average of 23%. This was most acutely felt by large sites (over 100 million page views per month), led by social networking sites, which saw eCPMs plummet 47% from March to April. Medium-sized web site monetization was essentially flat, while small sites (less than 1 million page views per month) saw modest gains month-over-month.
The article goes on to suggest that a possible reason for the slow down could be residual affects of the current problems with the US economy. Of course, this is a valid hypothesis and the overall economic woes probably are playing a large part in everyone’s reduced spending – from gas, to milk, to corporate online advertising.
Could it be possible that another reason for the drop in ad prices is that organizations simply aren’t getting the ROI on traditional text ads? Catone does point out that the study “didn’t differentiate between display and text ads.” The definition of “display ad” can be pretty broad, but I’d like to suggest that what he’s getting at, is the difference in performance between your standard run-of-the-mill text ad vs. a newer style video advertisement.
I’ve been a big proponent of the next generation of online video – especially as it relates to online advertising. Traditional online ad models aren’t working anymore – and studies like the PubMatic are starting to show the data that will prove it out. A recent April 23rd article by Melissa Chang of The Industry Standard describes three online video formats for the future and how they are proving to be more effective than traditional text ads. Do you think that this recent data from PubMatic suggests that advertisers are starting to pull their money from internet ads the new interactive video formats allow for Cost Per Action models?
