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View Poll Results: When will we see a significant correction?
I expect no change 25 36.23%
Q4 - 2002 4 5.80%
Q1 - 2003 2 2.90%
Q2 - 2003 7 10.14%
Q3 - 2003 4 5.80%
Q4 - 2003 6 8.70%
Q1 - 2004 3 4.35%
Q2 - 2004 1 1.45%
Q3 - 2004 4 5.80%
Q4 - 2004 2 2.90%
Q1 - 2005 0 0%
Q2 - 2005 0 0%
Q3 - 2005 0 0%
Q4 - 2005 4 5.80%
It's allready here 7 10.14%
Voters: 69. You may not vote on this poll

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Old 10-04-2002, 01:48 PM   #1
Steve_S
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Question When will we see a significant correction?

I thought it might be interesting and educational to determine what Webmasters/Publishers and Merchants think about the current state of the net economy and when we will see a significant correction. A similar Poll ran in 2/02 and may be viewed here.

IMHO, you can't run a business without a "plan" and a clear understanding of what your revenue is today and what factors will influence your revenue in the future. Income and expenses which you can control and or optimize and other factors which you can't control.


Definitions for a Q (a calendar quarter):

Q1 - January through March
Q2 - April though June
Q3 - July through September
Q4 - October through December

Definitions of other terms:

Significant correction: Each of us may have a slightly different view on what this term means. If we equate site revenue to CPM then perhaps a return to the days of a $2.00 CPM for an entertainment site or a pre tax net income for a Company which resembles the 1999-2000 levels. If we agree that an average CPM is 0.50 in a given space and it improves to 1.00 over an extended period of time, then that would be a significant correction.

Net Economy: Each of us may use a different revenue model. All commerce on the net is a good place to start. Your own perspective from your own site or Company. I'm trying to determine how each revenue model is performing on a given type of site or Company and stimulate some "big picture" thinking.

Please only vote once. Please tell us why and when you think the correction (if any) will occur in a given quarter/year and what "indicators" support your theory. If you have changed your revenue model in an effort to adapt to our current economy, your thoughts would also be valuable.

Your Help: If you have a suggestion for a new Poll, please only use our BB Feedback Form and send me your ideas and details. Some of our best Polls come from members, so your comments are always appreciated.

Respectfully,

Steve_S

Last edited by Steve_S; 10-04-2002 at 01:54 PM.
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Old 10-04-2002, 07:51 PM   #2
Nintendo
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It's missing an option...'It's allready here'

For all of us that know how to make money, the significant correction's allready here.

*hint* Dump the CPM banners... turn banners into text links....sell stuff....
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Old 10-04-2002, 07:58 PM   #3
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What Nintendo said. Don't expect any form of resurgence for banner ads. Adapt and you shall thrive.
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Old 10-04-2002, 09:08 PM   #4
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Advertisers such as McDonalds, Coke, Burger King, etc, have still yet to appear. I'm sure they will pay CPM, probably for some kind of special eye catching ad, maybe not even invented yet. But this will not be until a long time.
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Old 10-04-2002, 11:00 PM   #5
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OK Dr. Nintendo aka !!!

Your option is inserted. Thank you.

For clarification: So you are saying that your "net income per hour" is either better than it was a few years ago or about the same?

Formula: Gross Revenue from a single site minus costs like hosting, scripts, advertising, independent contractors, and such = adjusted gross revenue. Finally, adjusted gross revenue divided by the number of hours you spend on the site in a given month equals your "net income per hour"

?

AND does this include your forums or the site and or a combo? I'm sure many members would be interested in the details of how you did this and exactly how it could work on other types of sites.



!!!
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Old 10-05-2002, 03:29 AM   #6
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How have I adapted?

In 1995 I first dabbled with HTML.
In 1996, I created my first site. It would be classified as general audience/video games.
In 1997, I first put banners on the site and made a decent sum of money.
In 2000, this ad money had dried up and I began to learn how to sell online.
In 2001, I made a good amount in affiliate programs and through this I learned to sell decently online.
In 2002 (this year), I opened my first online store.

Prior to 2000, I was definitely a hardcore supporter of advertising. I felt it couldn't end and that we would see the great CPMs forever. When I saw the falling rates, I realized it was toast and moved onto sales.

I guess I'll ramble for a bit and post my thoughts on where a general audience content site will be going in the future:

- Pop ad rates will come down a very large amount in the not too distant future. The rates will drop much like banners have in the past.
- Cost per lead programs such as sweepstakes or E-Mail capture will continue to go down as more go into this industry and more people realize never to leave a box checked
- CPC programs who use Pay Per Click Search Engine feeds likely will experience lower bids as web site operators move to more trusted engines who do not syndicate their ads to any site that signs up.
- New, more intrusive ad formats will continue to be introduced in the future and they will come to be standard. For example, the flash ads we see now, full page ads, or even skyscraper ads which we are seeing more and more.
- Around this time, offline advertisers MAY start more aggressive online spending.
- Ad networks aimed at the general audience sites featuring these new ads will spring up and current networks will adopt them. They likely will attract a few offline advertisers. This will produce a sizable increase in publisher revenue.
- After a while of good times for these new ad units, rates will drop considerably and will be in-line with the drop in banner ads and pop ads.
- Offline advertisers who adopted these units will realize that dealing with a network is not the best strategy and will focus their buys on larger sites (ie: Yahoo, MSN, and other huge, well known sites).

After all of this is over, general audience sites run by independent web publishers will simply be paid what they can produce for merchants (ie: some form of affiliate version). An independent web publisher of a general audience site cannot hope to receive any extra money for 'branding'. Branding dollars will be given to larger sites who have larger sales forces and well known names. Owners of independent general audience sites likely will be able to make enough for web hosting as long as they do not provide large downloads. However, they should not expect to make a profit unless they gear themselves towards the sale of products. As a sidenote to this, I still feel that some sites can be successful selling their own ads in the future. However, they will have to be creative. For example, sell a site sponsorship with link boxes all over your site with banners, pops, and other forms of ads throughout. In fact, this could even be done today very effectively. If you want a great example of this, simply look at what Steve has done with GeekVillage (granted, GV is hardly a general audience site but the same technique could be applied to any site). Subscriptions are also another solution but this likely will not work on an individual site basis. There will need to be a HUGE network of sites (for those who know gaming sites, much like the old IGN or UGO affiliates except based on subscriptions instead of advertising).

Please note my above is for a GENERAL audience site. A targetted site that is a leader in its field still will be able to command dollars for branding.

I believe that those who are serious about generating revenue online and currently have large general audience sites should have already moved/are planning to move into fields where some form of product sales are taking place. This could be by making changes to your current site to include store features or by creating a new site entirely. Online sales are real results you can see. I know I'd much rather be making $10,000 in commissions from a cost per sale affiliate program now than $15,000 generated from advertising networks.

I really rambled in this post. I guess I should stop now.
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Old 10-05-2002, 12:43 PM   #7
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:::changed your revenue model in an effort to adapt to our current economy

Adapting, big time!!!กกก!!! Compairing it to what it would be if I never changed, if I was still relying on all the dead CPM networks, I probably wouldn't have any sites left. I don't expect the internet to ever get as easy to make money as it was in 2000. Now you actually have to work for it.

:::does this include your forums or the site and or a combo?

All sites, content and Amazon.com link sites.

:::New, more intrusive ad formats will continue to be introduced

New non-intrusive formats will probably also be invented, for example Amazon.com's Shopping cart. That even converts WAY better than text links!!!กกก!!!
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Old 10-06-2002, 11:09 AM   #8
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My scenario: ...in 3 years the dotcom disaster will be slowly forgotten, large companies...now not much interested in Internet business...will try to secure their part of the net....they will open ad-companies that's only purpose it is to gain big market share and even with loosing 300 million $ every year ...like Amazon in the book sector... premium sites will get paid for exclusive contracts... ...advertisers offered professional solutions..."home made" will not survive ...later...8 years...no movie or new audio CD without large investing into online advertising...often flash or other video streaming formats...but it will be nearly impossible to get into those networks without not only 1 million+ visitors/day, but also an extremely professional looking site, targeted to present those adds best. Advertisers will have to spend a minimum of 50 000$ to buy ad space from those networks...The gap between rich and poor will appear...like everywhere in this world today...
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Old 10-06-2002, 03:02 PM   #9
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CPMS will continue to drop for small publishers.

Eventually the Internet will be like television, controlled by only a few major networks.
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Old 10-06-2002, 04:12 PM   #10
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Quote:
Originally posted by ws2002
CPMS will continue to drop for small publishers.

Eventually the Internet will be like television, controlled by only a few major networks.
I really don't think things will go that extreme a way. The internet is fundamentally a different entity from television. It's powered by individuals, with the best content run by them as well. As long as there's a demand for great content, there will be people that are savvy enough to balance cost with revenue to supply them. It's just that such sites will continue to decrease.
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Old 10-06-2002, 04:15 PM   #11
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Quote:
Originally posted by ws2002
CPMS will continue to drop for small publishers.

Eventually the Internet will be like television, controlled by only a few major networks.
I agree with that. The reason why the market was good before is because it wasen't saturated like it is now. Competition is high for almost every type of website and if a advertiser can pay lower to advertise on a certian site they will. The only way high cpm's can come back is if there is a major movement among publishers that refuse to run low cpm's prices. if that happens, the advertisers will have no choice but to pay what publishers want like before.
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Old 10-14-2002, 09:34 AM   #12
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In regards to CPMs dropping even more for small publishers :

It can't drop much further. As it is now small publishers have a hard enough time getting into programs that pay CPM. Those CPMs that they can get into make as much as or less then their CPC / CPA counterparts. CPM average will only drop down as far as the other advertising models, and I believe it's already there.

If CPC and CPA increase so will CPM. If CPC and CPA decrease so will CPM.

Now, CPM with popups is a different story.
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Old 10-22-2002, 09:54 AM   #13
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"The e-economy spectrum"
Liberals (CPA only) |--------------------[--|--]---------------------|Conservatives(CPM only)

And of course the moderates in the middle
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Old 10-22-2002, 07:37 PM   #14
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Correction, it goes like this.

"The e-economy spectrum"
Conservatives (CPA only) |-----[--*--]-----| Liberals(CPM only)

*=And of course the moderates in the middle

Liberals want money the easy way (place a CPM banner and watch a tiny bit of money come in) and Conservatives want to work for there money (Selling stuff).
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Old 11-06-2002, 07:22 PM   #15
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I vote" I expect no change"
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