PDA

View Full Version : Ad Market Down - Advertisers to blame?


LastActionHero
12-05-2001, 08:36 AM
Hello,
The terms in the ad market today are dictated by Advertisers whereas it should be the opposite. I'll make a comparision with TV here.

1. CTR's vs Branding
As in TV the most important thing should be not what the users actions were after seeing the ad but what the impact was on the user. Users can't be expected to react to an ad immediately hence the low CTR's. Tracking clickthrus should be totally done away with. A good example of branding is classmates.com I remember classmates.com ads even though I haven't clicked on the ads but I have visited the site independently. Branding has a greater effect than immediate clickthrus.

2. Creativity
The job of creative ads rest on Advertisers. If the ad is not doing good there are basically two reasons
1. Not attractive enough(same as on tv) - Fault with advertiser
2. Bad targetting - partly advertisers fault because he should look at the demographics being targetted. You don't see ads for grocery items during a chess game? Do you? (just and example)

3. Banner ads don't work
Again as above the ads are not creative enough. I only click on ads that interest me or get my attention. Now the reason that the surfer has got used to banner ads and doesn't look at them is not true. On tv everyone gets 10-15 second ad spots and they have to make the best use of that time available to them. The same with Banner ads. Everyone has got same space available. They should be more creative and make the best use of it. It's an even playing field.

In this scenario is it really the publishers who should take the blame for generating low clickthrus? or low cpm's?

I think the CPM model is best suited for branding purposes.

ralphch
12-05-2001, 09:50 AM
I totally agree with you.

Ralph.

jwilliams
12-05-2001, 03:12 PM
I agree with you except of one thing. It is true that if the banner is interesting and suits the site`s content users who have visited the site will most likely take a look at it. But as you mentioned some banners are boring, do not come out good enough or they simply do not work well with the site. So the product must be represented in the right way.

As the number of experienced surfers is growing most of them started ignoring banners and other ad types. Why? Simple, because behind an ad there is always something you must pay for, so most people ignore them, or just take a visit without buying anything. (If they even see the banner). If banners would be bigger and more attractive there should be no concerns about better clickthrough. But would that higher the conversion ratio? Not for a lot.

You see, buying over the internet takes time and a lot of users (including me) are afraid of credit card fraud. Therefore we should have 2 types of advertising. One like we know now and the other one where we would start with TV alike advertising. By advertising products we can buy especially in local stores. Of course also over the internet. So that actual View is important. Also that should higher the CPM rate because of good results this may bring. Advertising Mcdonald`s food, Lipsticks, Nike Shoes and other familiar products should work extremly great. I can tell you from my own experiences that while I surf the net I do not look at the banners at all. Therefore I believe eyeblaster ads and other full size ads are the future. Internet advertising will soon become TV alike. I believe that`s a needed step.

So what to do? Get full size ads, which should load each time a visitor comes to your site for about 5-10 seconds. Avoid other stuff, like popups and always have an option to cancel the ad. But not with a single click, but through a menu or something, so that user will not always be in a mood to do all that clicking, so he will wait those few seconds and watch the ad playing.
It should bring great results.

Best Regards,
Luke

Kaiosama
12-05-2001, 03:31 PM
Since we'll be leaving the targetting up to the advertiser, the only thing a publisher can do wrong is design the website so that the ad is in an out of the way place that visitors can easily overlook.

Too many webdesigners do this and many websites have this type of design. That hurts people that actually do design websites with the performance of ads in mind. too many website keep their ads far from the meat (content) of the site.

Jack
12-05-2001, 04:52 PM
It has been my belief that if you want to get branding dollars, then your site better be very well branded yourself. Many publishers believe that they should be paid when the advertiser receives no benefit they can see (sales, leads, clicks or anything else). However, how many of you here are willing to advertise your own sites on other sites with no clicks, sales, or leads? I would doubt many would (I know I sure wouldn't!).

The companies who spend money on TV advertising do so because the TV networks are big corporations, well branded, and well established. They know they are dealing with a professional organization when they place their ad on NBC. However, an ad on "Joe's Game Site" does not have that same sense of professionalism. Yes, I do believe that those who advertise on TV will turn to online ads soon. However, the branding money will be going to big branded sites (Yahoo, AOL, etc.) or well branded sites that are considered a leader in a niche category (like GeekVillage), not sites that most all of us here run.

Pirouz09
12-05-2001, 04:56 PM
Since the slow downs in the economy we have witnessed the internet market develop into an advertiser's heaven. Advertisers are no longer required to pay high CPMs or CPCs in order to get their company or product know to the public. With very few active Advertisers out there, ad agencies are accepting any campaign that they can get their hands on regardless of how low the buy is. Filling the inventory has become the most important factor here. There needs to be much more focus on targeting and branding the campaigns. We as agencies need to work together in order to develop standards and stick by them. An Advertiser offering $0.15 CPM on banners would have gotten a few thousand laughs a couple years ago, but now I see everyday salesmen busting their butt off in order to increase a proposed $0.15 CPM campaign to $0.25 or .30. Although the economy has hit us hard, Advertisers have taken full advantage of this situation in order to bring the buys to a maximum low.

Jack
12-05-2001, 05:04 PM
Pirouz09:

Then take advantage of the low banner CPMs. If you feel they are low, then you could work up a product/service idea that takes advantage of low banner CPMs and buy up as many as possible :) This is somewhat what I have done (well, I haven't hit on a product/service that can be sold on untargetted banner buys, but I did switch from relying on CPM to developing products/services).

Steve_S
12-05-2001, 05:48 PM
Fasten your hard disk :)

1. Pointing fingers by either party does no good. It's called supply and demand and it swings both ways over a long term. Publisher and Merchant relationships should be viewed as a partnership in good times as well as bad. Those that undertake an "adversarial" relationship on either side of the fence will probably not be around to smell the roses.

2. Creatives are the responsability of both parties. It's not reasonable to exspect a network with thousands of sites to understand your visitors like a Publisher does. Make them if you sell adverts directly. Tell them. Communicate in a civil and respectfull manner.

3. Determining who is responsable for our current state of affairs won't fix my bank balance. All any of us can do is learn from the past and take action today to improve the issue.

4. No one on planet earth or even mars should think that "business" is always fair or equatable.

5. We need to see more of this: "Hey Mark Merchant, I just joined your program and it looks great. Can you give me some tips on how I might improve my RPV? :)

6. For some, it's time to close the site or program and move on. Nothing wrong with this.

wly
12-05-2001, 06:21 PM
I have to agree with Steve. Neither advertiser nor publisher were to blame. Back in 1998, there are only a few sites on the net and few people with internet connections. These days there are literally thousands of sites that offer similar content that can serve millions of pageiews per day. These would definitely bring CPM to its knees. Even Yahoo, if you notice the main page will never run out of ads but in contrast when you goto Geocities, they mostly serve default banners ;) Banners are definitely good for branding and bad when getting conversions while text links are the exact opposite. You can try reading Ken Evoy's site http://www.sitesell.com Great advice on how to pre-sell and literally make your site sell which is definitely the future for small publishers like us. :)

LastActionHero
12-06-2001, 03:21 AM
I agree that branding on a site requires a strong branded website, which only the big players can accomplish. But in the TV world you do have big TV channels and small ones and Big Shows which command more revenue and small ones.

Similarly we have big Ad Networks and Small ad networks and we have big sites and small sites.
The largers Ad networks accept only those sites which have a strong online presence. The smaller Ad Networks cater to the not so popular ones. You see a lot of ad networks accepting sites which don't cater to their market or those who don't have the requsite traffic. IMO this drives down the quality of ads shown on websites. People see ads on low qaulity websites and tend to associate the ads with low quality products thus having a negative effect on branding.

What I'm saying is that Ad Networks should move on from the pay-for-performance based advertising to branded advertising for a better ad market.

ps:
1. Shows that don't do well on TV tend to drop out and don't attract advertisers, similarly websites shouldn't get advertising if the website itself is not doing well.
2. Wly: thanks for the site link, looks interesting.
3. I would love to hear what the advertisers have to say about this thread.

Rendelius
12-06-2001, 09:21 AM
In my humble opinion, the downfall started when CPC was invented. This was like telling a print mag "I'll pay for my ad according to my sales". This is rubbish.Given that the banner is placed accordingly, the impact of it is solely determined by its quality. For a pro, it is no effort to create a banner that generates a low CTR whilst having a lot of impact regarding brand awareness. Mix this one with a real CPC banner designed for clickthroughs and you get the best bang for the buck, seen from an advertiser's view.

CPM is HIGHLY underpaid nowadays. The biggest problem in turning around this situation is, as I see it, that advertisers have their lobby, publishers haven't. So there will be no cooperation as long as the situation favors advertisers.

Advertisers look at me like if I am a demon when I tell them that I charge 6-8$ CPM on my site for a banner that suits my site's content. They think it is too expensive. Regarding the current market situation, they are right. But if they do a good banner, have a good product my target audience is interested in, it's still a bargain. Try to get a contact to your target audience for 6c per person in other media (count all the loss you have due to persons not being your audience) - you won't be able to do that.

JP Sauve
12-08-2001, 12:01 PM
Originally posted by Rendelius
In my humble opinion, the downfall started when CPC was invented. This was like telling a print mag "I'll pay for my ad according to my sales". This is rubbish.


The Net doesn't have nearly the branding power that print media has, at least not with current ad technology in place. Also there's currently way too much supply and not enough demand for Net ads. Print media doesn't have nearly the surplus of adspace compared to the Net.

If it did, and if print media ads could track sales as easily as Net ads, you'd probably see similar pricing models.

This is an argument we've seen over and over, but really you cannot compare the Net with any other advertising medium. There are similarities, but too many differences.

Rendelius
12-08-2001, 12:13 PM
maybe I failed to make my point.

It is my firm believe that the responsibility for the publisher for the success of a campaign ends with the placement of the banner/ad. Paying him per click/action/order is like making him responsible for the quality of the campaign, the quality of the product, the ease of ordering, the reputation of the advertiser.

Jack
12-08-2001, 03:01 PM
Even with an incredibly targetted ad, paying $6-$8 CPM will be amazingly difficult to generate a ROI off of. Figuring with a $7 CPM and the industry standard .3% banner CTR, it would cost an incredible $2.33 per visitor. If your site and the banner were to work well together and a 1% CTR were established, then the advertiser would still be paying $.70 per visitor. I can go over to Goto right now and buy the top spot for RPG for $.18 per visitor or an amazingly low $.03 per visitor at Findwhat, receive guaranteed clicks, and work with a company that is large and established (that last part wasn't meant to be an offensive remark; just most companies would prefer to deal with larger sites). There is a branding aspect to a banner ad, but I believe the smaller advertisers that would be interested in advertising on your web site cannot afford to pay for branding. And the larger companies will wish to go with a larger site (or else find places where they can get branding banners cheaper).

ralphch
12-08-2001, 03:34 PM
Now, I'm working on a new standard that I call CPX. It's supposed to bring the power of branding over to the Internet. More on this soon :)

Ralph.

Kaiosama
12-08-2001, 06:20 PM
Originally posted by suave



The Net doesn't have nearly the branding power that print media has, at least not with current ad technology in place. Also there's currently way too much supply and not enough demand for Net ads. Print media doesn't have nearly the surplus of adspace compared to the Net.

The net has equal if not more branding power as printed media and the technology already exists to utilize this power. Unfortunately it's alot easier to convince advertisers to buy 100,000 468X60 banner ads for $50 instead of 100,000 120X600 banner ads for $25. It get's even harder to convince advertisers to buy one of the newer more obscure yet effective ad formats.

The publishers are partially to blame since we don't push newer formats as much as we could. Unfortunately we stick to ineffective banner ads that take a minuscule amount of screen space. A good number of us also place it in an isolated part of the screen so our visitors can enjoy the site more by being able to easily skip the ad.


If it did, and if print media ads could track sales as easily as Net ads, you'd probably see similar pricing models.

Well, since we are able to effectively brand sites/products we can see similar pricing models once we actually utilize this. The real problem other then massive amounts of ineffective advertising is supply and demand as Steve mentioned.


This is an argument we've seen over and over, but really you cannot compare the Net with any other advertising medium. There are similarities, but too many differences.

While net advertising is different from others as print is different from video there are several fundamental truths that you must consider about all forms of advertising. Advertising can only make people aware of your product, service, or storefront. The advertiser has to convince the consumers to purchase.

With the net we've really got to "wait" for the rest of society to catch up. We'll have to improve how we deploy advertisements as a whole. Plus we'll need society to openly use things like credit cards and create a kid-teen version of something similar but more limiting. We are really behind in this area and I believe that our banks either don't have a decent standard for electronic transfers or are just not employing the standard. Either way it'll be another 5-10 years before we can effectively revolutionize how we use money here in the states.

In the end it's really "not this person or groups's fault" we all have faults or inefficient advertising practices. If society continues the way it has we will slowly but surely recover.

orfeo
12-09-2001, 06:23 AM
Originally posted by Jack
Even with an incredibly targetted ad, paying $6-$8 CPM will be amazingly difficult to generate a ROI off of. Figuring with a $7 CPM and the industry standard .3% banner CTR, it would cost an incredible $2.33 per visitor. If your site and the banner were to work well together and a 1% CTR were established, then the advertiser would still be paying $.70 per visitor. I can go over to Goto right now and buy the top spot for RPG for $.18 per visitor or an amazingly low $.03 per visitor at Findwhat, receive guaranteed clicks, and work with a company that is large and established (that last part wasn't meant to be an offensive remark; just most companies would prefer to deal with larger sites). There is a branding aspect to a banner ad, but I believe the smaller advertisers that would be interested in advertising on your web site cannot afford to pay for branding. And the larger companies will wish to go with a larger site (or else find places where they can get branding banners cheaper).

I believe your point starts at a wrong foot. You say that .3% is the industry standard CTR and you are right. But this number is a result of the low-quality (don't-clickme I like to say) CPC banners. A couple of months ago i-clicks (a CPC program) introduced a CPM banner that would only run some hours per day. It was the common "If this banner is flashing you are a winner". While I only had around 0.25% CTR on all the CPC banners of the company I reached 4% CTR at this banner. And my site is humor related and has no targetted audience. You see my point? I believe that a pretty and of course targetted banner at Rendelius site could produce a 5% CTR.

That number changes all the math. At $7CPM and 5%CTR it is $0.14 per targetted visitors. Not bad heh?

Sorry for my English