February 25, 2008

Online ads are priced right

There’s a good inter­view with the CEO of an online ad firm at Sil­i­con Alley Insider that raises a very good point about Inter­net adver­tis­ing rates:

Moore: The fact of the matter is the Inter­net has been either dra­mat­i­cally under­priced or offline media is dra­mat­i­cally over­priced. Right now a reader of the Wall Street Jour­nal might be worth a dollar, but for some­one read­ing the online Jour­nal you get a nickel. That’s 20 to 1 offline versus online pric­ing. You need 20 online read­ers to replace one offline reader. So when you talk about pric­ing over­all I think the web is dra­mat­i­cally under­priced already.

(Via O’Reilly Radar.)

While I think most of us in the Inter­net pub­lish­ing busi­ness would like to think ads are under­priced, my gut says no.

Long term, the Inter­net is going to prove dis­rup­tive to the tra­di­tional dis­play adver­tis­ing model — users can get to advertisers’ infor­ma­tion directly with­out the mid­dle­man of a con­tent provider.

What does this mean for con­tent pub­lish­ers on the Inter­net? What busi­ness model(s) will emerge to reign supreme?

I. Wish. I. Knew.

Filed under: Business,Technology

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  • http://www.linkedin.com/in/stevesassi Steve Sassi

    Hey Chris,

    What would be a fair price? Daily Kos gets a mil­lion unique vis­i­tors a day, here’s their weekly rates, the second number is ‘impressions’(hits?)I guess in that week:

    Dai­lyKos http://​www.​dai​lykos.com (1 ad running)Premium $15,000 9,190,440 (no ads running)Second Slot $6,250 9,175,922 (3 ads running)Standard $4,500 9,124,064

    This is more than Politico which also prints weekly and offers a mul­ti­me­dia ad approach! more info about the “liberal ad network” http://​web.​blo​gads.​com/​a​d​v​e​r​t​i​s​e​/​l​i​b​e​r​a​l​_​b​l​o​g​_​a​d​v​e​r​t​i​s​i​n​g​_​n​e​twork

    Drudge Report gets 10 mil­lion vis­tors a day. I don’t know their rates but I’m sure its a lot more.

    Do you think this is over­priced? Or is this aver­age for the Polit­i­cal Blogs (which I’m hooked on for this Pri­mary race). How about your rates? Do they approach this? If so, I’m start­ing a blog today.

  • http://heisel.org Chris

    Steve,

    I cer­tainly am not knowl­edge­able enough to name a fair price (and it depends on the site, the site’s demo­graph­ics and audi­ence, tar­get­ing model, etc.).

    Would you agree that while adver­tis­ers are pour­ing more money into online dis­play adver­tis­ing right now, the model itself may have some shaky foun­da­tions given user behav­ior and the disinter-​mediating nature of the Web?