Monday, February 23, 2009

The lure of cheap online advertising, the new economy... and you

Do you want the good news first, or the bad news? It all depends on which side of the advertising coin you fall on...

Oh, all right, I'll give you the good news first: online advertising is becoming cheaper than ever. According to a recent Business Week article, Ad networks (the ones that buy space on lots of little sites as opposed to a few large ones) are transforming the industry in such a way that many big, traditional advertisers are choosing to shift their budgets.

"Several industry sources estimate that, out of the $8 billion advertisers spent on display ads last year, 70% went directly to Web sites and 30% to ad networks. This year, based on spending shifts in the past month or so, they project the mix could move to 50-50."
What does this mean? First, advertising is a lot less expensive (as low as $2 per 1,000 views as opposed to $40 per CPM) and second, your ads can be viewed by a whole host of target audiences and sub-targets that you might not ordinarily reach.

The bad news? If you're a content provider, times are tough. The whole industry is changing and it would be very difficult, if not impossible for a media outlet to survive on a diet of advertising dollars alone. But I bet you knew that already. Aside from the major kids entertainment players who still churn out original content on a regular basis (i.e. Disney, Nickelodeon, PBSKids, KOL, Discovery) nearly everyone else has shifted to a virtual world, gaming, retail or software-based business model.

The other bad news? If you are advertising to kids or their parents, your ads could show up on sites that --shall we say --aren't exactly in line with your brand. And you might not even know about it.

My advice? It all depends on your brand. What are you advertising? Who are you trying to reach? If kids are your primary target, you might be better off spending your precious ad dollars somewhere else (even if the CPM is higher) for no other reason than to preserve your brand's integrity. However, if the parent audience is the one you seek, go for it. Moms and Dads surf the net constantly, they've completely taken over Facebook, and the Mommy blogging community is growing about as fast as these ad networks are growing rich.

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