Pricing Tensions Shake Up Web Display-Ad Market

The big media companies should blame themselves for creating more ad space than demand dictates. Display ads from the same advertiser should run on multiple pages. It would provide a greater return to advertisers and gets rid of the tacky brand-cheapening ads.

Raining meatballs would be funny on Jon Stewart but would turn visitors off to a weather website and wreck the brand. $50 CPM display ads on a general audience website are unnecessary; $50 CPM on a smaller, targeted-audience website is more cost-effective. The smaller, targeted-audience and city/regional websites are also where less expensive text ads can yield a higher CTR than display. The beauty of the internet is the ability to advertise to a targeted demographic. Google’s DoubleClick ad exchange should be very effective at allowing advertisers the ability to find smaller to medium volume web publishers to cost-effectively reach the right audience.

In the meantime, big media websites burning cash should try to learn from web entrepreneurs who are generating free cash flow in this environment.

Read The Wall Street Journal article.

Categorised in: Dr. Dorfman on WSJ.com

This post was written by Dr. Jeffrey Dorfman