programmer2k
New Member
any particular reasons?
It seems like web-business will be really hard to do if you depend mainly on ads.
It seems like web-business will be really hard to do if you depend mainly on ads.
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Why are online Ad companies going down?
- Thread starter programmer2k
- Start date
Following is a response that I made withing SitePointForums to a similar question posed on the 18th of March:
Several factors have contributed to the current market downturn - some economic, some technical, some media-driven. A small summary of those factors follows:
1. The big, cash-burning dotcoms who drove the golden days of online advertising have either gone under, been acquired at fire-sale prices by traditional companies, or have severely cut back their marketing budgets in order to focus on survival.
2. Banner click-through ratios have decreased to fractions of a percentage point, which (rightfully or not) has led many marketers to see them as a weak medium. Of course, by focusing purely on accountable response ratios, many marketers have ignored branding theories.
3. The global economy as a whole is on the brink of recession, and marketing budgets for all companies are traditionally reduced during such periods.
4. The media who fueled much of the "irrational exhuberance" of 1998-99 with stories about dotcom millionaires and the superiority of the New Economy over the old, have done a 180 degree turn, and now seem to focus only on the decline of those former high-flyers that they themselves touted just a few years back. The abundance of stories about layoffs, failed business models, unprofitable dotcoms, etc, etc, contibute to the mindset that online advertising is not effective.
5. With dotcom advertisers moving out, companies are turning to traditional advertisers to take their place - but this takes time. At present, only about 2% of all ad dollars are flowing online, regardless of the fact that the internet accounts for some 11% of people's media viewing time. Balance will be found, but it will take time.
6. The medium is still in its seminal stages. It took decades for television and radio to get things right. Online advertising has evolved at an incredible rate, and has offered marketers the world. The failures have been well publicized, and the successes less so. It remains, though, a largely experimental medium for many, so their exposure to online advertising will be tentative for the next few years.
Several factors have contributed to the current market downturn - some economic, some technical, some media-driven. A small summary of those factors follows:
1. The big, cash-burning dotcoms who drove the golden days of online advertising have either gone under, been acquired at fire-sale prices by traditional companies, or have severely cut back their marketing budgets in order to focus on survival.
2. Banner click-through ratios have decreased to fractions of a percentage point, which (rightfully or not) has led many marketers to see them as a weak medium. Of course, by focusing purely on accountable response ratios, many marketers have ignored branding theories.
3. The global economy as a whole is on the brink of recession, and marketing budgets for all companies are traditionally reduced during such periods.
4. The media who fueled much of the "irrational exhuberance" of 1998-99 with stories about dotcom millionaires and the superiority of the New Economy over the old, have done a 180 degree turn, and now seem to focus only on the decline of those former high-flyers that they themselves touted just a few years back. The abundance of stories about layoffs, failed business models, unprofitable dotcoms, etc, etc, contibute to the mindset that online advertising is not effective.
5. With dotcom advertisers moving out, companies are turning to traditional advertisers to take their place - but this takes time. At present, only about 2% of all ad dollars are flowing online, regardless of the fact that the internet accounts for some 11% of people's media viewing time. Balance will be found, but it will take time.
6. The medium is still in its seminal stages. It took decades for television and radio to get things right. Online advertising has evolved at an incredible rate, and has offered marketers the world. The failures have been well publicized, and the successes less so. It remains, though, a largely experimental medium for many, so their exposure to online advertising will be tentative for the next few years.
Congrats! @ Czar, 200 posts keep up the good work!
Also, you forgot one...
The main reason Ad Companies are going down is because I sprayed potent Revenue killing fly-spray, although it didn't kill everyone... that damn Standard Internet bugger survived, grrrr.... immune to all slumps, almost.
Also, you forgot one...
The main reason Ad Companies are going down is because I sprayed potent Revenue killing fly-spray, although it didn't kill everyone... that damn Standard Internet bugger survived, grrrr.... immune to all slumps, almost.
jw
Active Member
What this means to us...
People are too one-sided on this issue. Now that ad rates are wayyy down, small publishers like us can afford to make our name visible. Think about how great the market would be if smaller publishers started buying more advertising space, but the problem is smaller publishers don't want to invest a penny, yet make a killing, which is getting more and more impossible. Take for example, Google. Now you can advertise you site on any keywords, phrases, etc, for $3 cpm. So, whenever someone searches for a word you entered, it shows up at the top of the page. Pretty neat huh?
People are too one-sided on this issue. Now that ad rates are wayyy down, small publishers like us can afford to make our name visible. Think about how great the market would be if smaller publishers started buying more advertising space, but the problem is smaller publishers don't want to invest a penny, yet make a killing, which is getting more and more impossible. Take for example, Google. Now you can advertise you site on any keywords, phrases, etc, for $3 cpm. So, whenever someone searches for a word you entered, it shows up at the top of the page. Pretty neat huh?
Google's AdWords is neat, but not for small publishers. $3CPM is a huge amount to pay, and subscribers to the Online Ad Digest would know that this will convert to about 20-40 cents/click for most sites. As such, small publishers would be better off sticking with GoTo.com, FindWhat, GoClick and Sprinks, or by establishing a CPC or CPA affiliate program through ClickXchange.
