BUSINESS WEEK -New metrics could change pricing, reach of online ads April 9, 2009
Posted by Mark Blei in : Uncategorized , trackbackA Pricing Revolution Looms in Online Advertising
By Ben Kunz
Look just to the right of this article. There, on your computer screen, lies a little, two-dimensional secret that will soon threaten major online publishers and their precious advertising revenue.
It’s called the banner ad, and its cost may plummet.
For a decade, Web site publishers have relied on an old advertising model: Publishers provided advertisers access to readers, and the more desirable those readers, the more an online publisher could charge. WSJ.com, for example, charges advertisers as much as $64.60 to show a banner ad to 1,000 viewers. (In advertising language, this is called CPM, or cost per thousand impressions.) In the past these fees made sense becauseThe Wall Street Journal’s readers are highly affluent, a perfect target for many upscale brands. The better the audience, the more advertisers are willing to pay for ad space.
But what if marketers could find new ways to reach the same audience—with ads on sites that won’t charge nearly as much? What if those other ads cost as much as 95% less?
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