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Posts Tagged ‘ad rates’

This is a pretty useful data dump from Google’s CEO

Economic situation pretty dire. Combination of what we’ve seen does not appear to have a bottom. People are using the Internet more. Obviously will affect online ad market because our systems are so tightly tuned. It will eventually be reflected in CPC, CPM. We are not immune to this. We may be better positioned from ad perspective, but ultimately the real pain felt by companies worldwide will sometime translate to our world

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Ah, TechCrunch.  You whipped out the old Excel and made the industry famous Up And To The Right Chart.

There is no strong conclusion to draw from this very limited data set.  The only piece of interesting data is:  of the big 4 media companies presented here only Google has any sustained growth and makes up the majority of 4th quarter growth.

The Industry is NOT doing well at all.  Time Warner and News Corp had major losses, and they have huge stakes in the internet.  Yahoo, MSN, AOL all suffered major losses.  Mid-tier Smaller publishers are getting crushed, and you won’t see that in any of this data or any emarketer reports.

If companies in the media industry want to actually survive, get real.  The existing ad model stinks and this recession just nailed the coffin shut.  Don’t take my word for it, run your own analysis. (Just for fun, go look at the ads running on Yahoo, MSN, Facebook, MySpace, Video game sites… let me know if you see a direct sold campaign.  Let me know if you find a non adnetwork ad tag…) Hurry and do it, because this is one short runway and there ain’t no Hudson river nearby.

The biggest advertisers in the game (financial services, computer companies, and auto makers) all took huge hits and continue to falter.  The ad budgets have been slashed and they aren’t moving product.  With that mix, media companies can’t do anything about their ad revenue streams if they don’t find other ways of making money.

No, I’m not doom and gloom.  This is all about reinvention and change and exploration.  The old model stinks and now we get to find out what to do next that is better for the user and the advertiser.  This is good.  It is also painful. It is not Up and To The Right, despite the fact that excel seems to only spit out charts of that type.

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Ah, Ad Networks!

Glam gives us this juicy insight into what’s happening over in ad network world. It’s not going to be a fun 2009.

Despite the slower economy, Q4 was the strongest quarter we have had—we will end the year in a triple digit ad revenue growth rate year over year, and also very strong sequentially. We believe Glam is one of the few digital companies with this level of growth in revenue today. The reason is the focus on making our customers-—the agencies and brands successful online, being the number one for women, the scale of reach, premium inventory, targeting technology, custom solutions and our strong publisher network.

Unfortunately, despite their claim for best quarter ever, it’s not really that impressive.  Most online advertising in their categories went up due to holidays and more spend online each year.  It’s not Glam specific.  I see enough detailed data in this industry to know that Glam isn’t crushing it more than anyone else.

The reality is the ad networks and brand advertising online are in for a massive new year’s hang over.  The spends are spent.  The registers ring for a few more days. Then we’ll start to see what we really have.

Glam and other ad networks will lose business because publishers will slowly  get better with online sales and delivery (because they have to!) while the ad market softens in q1.  Glam’s eCPMs will be locked in a market rates because it’s buys and sells are massive and not really all that specialized.  Worse most (not all) of its network sites are bottom of the barrel publishers that will themselves struggle or go under.  In fact, 80% of them are complete SEO spam or worthless blogs and Google’s SearchWiki and other efforts are burying these sites.

(Note: You can tell when a networks traffic is mostly garbage when it hides the Site Affinities on Quantcast – those are the sites users visit in addition to the one publisher.  If you want to hide them, it usually means you are buying traffic or have lots of trashy SEO.)

Glam will not go away, but its not going to recover its valuation ever.  It has already built its business and it won’t be able to overhaul itself to whatever comes next.  Brand advertising online requires big brands and Glam won’t be able to hold on.  The race to win the advertisers is getting very tough now that the old publishers are racing as fast as possible to compete in social media and direct ad sales.

Lastly, Ad Sales is a talent driven business.  It’s about who your ad sales people know.  The technology, the publisher network, and the name isn’t really a differentiator.  So as the salaries and commissions come way down, the sales folks will bolt and take their network with them.  I’ve seen this happen at least 10 times in my direct experience and there are countless examples with Y! and others playing out right now.  Killer sales people keep the brand ad game in business and Glam doesn’t appear to be the place to earn the big bucks.  If you want proof, dig into the heads of sales and the top performing businesses, you’ll see revenue directly correlates.  It’s true in TV, Radio, Magazines and Online.

Maybe I’m wrong and Glam can buck the massive trend in brand ads taking a dive online (both in eCPM and overall buys…).  I doubt it and I won’t be buying my traffic from Glam any time soon.

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