Comments on: Online Ad Spending May Grow, But Not Evenly Across All Online Formats

By: Chas

Chas — Wed, 03 Dec 2008 04:24:52 +0000

@jackmayhofferr, I bet that the variance between formats will be much greater than 3%. For example, paid search (which is dominated by Google) will be up by 25-35%, year over year. If banner ads sold by horizontal ad networks are lucky, they’ll be up 5-10%, which would mean growth at the bottom of my pyramid picture would be 3 to 7 times the growth in the middle.

My category definitions are imperfect. But generally DR programs — paid search, text ads and banners available via certain ad networks — are purchased on cost-per-action basis such as cost-per-click (CPC). Standard banners are sold on a cost-per-thousand impressions (CPM) basis. By sponsorships and rich media, I’m referring to special placements adjacent to unique, limited supply, high quality content. A TV analogy: middle pyramid stuff is buying a certain number of :30s that run within any of the shows or dayparts on a particular network; top of the pyramid is buying the first commercial in the first commercial break during Monday Night Football — as well as sponsoring special programming during halftime.

By: jackmayhofferr

jackmayhofferr — Tue, 02 Dec 2008 18:58:02 +0000

Looks all formats will have positive growth and the difference is less than 3% between formats. Since this is a “forecast”, that >3% seems a reasonable margin of error, so the impact may be nil. I do agree that marketers will be looking for more accountability in all areas of marketing, esp. online.

Also, not sure what the difference is between a DR banner and a “Standard” banner. Is a standard banner, one that is run with out targeting or regard to ROI?

By: Florent

Florent — Tue, 02 Dec 2008 17:57:38 +0000

100% agree with that. The only escape for branded publishers is “up the ladder” since they can’t offer search and, frankly, are not this efficient on direct response programs. So it means more expansive ad programs (increasing cost of sales and marketing) while 70% of the unsold inventory will be sold at depressed remnant rates (think 75cts max for the ones that are used to tap above the dollar).
Great chart!