The Wall Street Journal recently reported that revenue from online display advertising fell 54% in Q4 2008 from Q4 2007. Sites like CollegeHumor.com and Evite are seeing the decling in revenue, as well as big portals like AOL. While some of this is blamed on the economy (like most everything these days) I can’t help but think that the marketers of big brands buying expensive display advertisign on sites that receive thousands of visitors a day are going about their online advertising strategy all wrong.
AOL saw a decline of 25% in display advertising in categories such as “personal finance, technology, autos and retail”. Fine, we can chalk that up to the economy. The Wall Street Journal blames additional decreases in revenue on a never-ending supply of inventory, meaning new web pages constantly being created to host content, which can also be home to display ads. Alright, I guess that makes sense too. Higher supply means lower demand and prices must be lowered (apparently I remembered something from economics). But here is where I see the real problem in display advertising.
Big brand marketers buy placements online like they would for television. They push their message to a mass audience without taking into account qualificiations of these visitors or how receptive they might be to your message. Just because we’re used to sitting through your commercials while watching prime time television doesn’t mean we’re going to pay any attention to you while trying to figure out what to make for dinner.
How cost effective can it be for Honda to be buying rich media display advertising on the home page of CNN? Toyota on the Food Network or Weight Watchers on the homepage of Evite? Do you have a positive ROI from these ads? Are you even tracking your ROI on these kinds of ads? It shouldn’t be difficult for these big brands to get their analytics into shape and figure out where to put their online dollars. Why not run Weight Watcher’s ads on blogs talking about healthy eating? I bet you have a much larger pool of qualified viewers there, despite the much smaller number of impressions. This results in higher click through rates and conversions at a much lower cost and higher ROI. Ah, if I only I could get my hands on some click through rates.
Read the Wall Street Journal article here: http://online.wsj.com/article/SB123483323444195983.html