heisel.org

Online ads are priced right

Monday | February 25, 2008 | 8:28 pm  

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.

• Unlike print, very few folks go online specif­i­cally for advertising
• Those that do, go to a business’ Web site directly, or to a free list­ing site.
• Stud­ies show that users are in a “seek” mode most of the time online, so they’re likely look­ing for the con­tent that’s near the ads
• Eye­track­ing stud­ies con­firm that users very rarely look at the ads once they’ve found the con­tent their look­ing for

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.

Permalink | Comments (2) | Categories: Business, Technology