You’re Paying Too Much for Online Advertising

May 29, 2007

The blogs, although biased, continue to proclaim the boom of online adversting, and it seems as if Microsoft (aQuantive) and Google (DoubleClick) agree. 

With less selection of inventory, alternative online adversiting forms such as PayPerPost will likely spring up and be successful in the short run.  You’ll also see a large increase for ad management and SEM firms because they work off a percentage of the advertising dollar spent.  Overall, it means you’re going to be paying too much for online advertising if you’re not evaluating click-thru-rates and using alternative ad vehicles.

The best part about the flourishing online advertising industry is that there’s a reason for it, and the worst part is that it’s a short term boom.  Starting at the end of this year, most advertisers will no longer be able to generate the same reach from their ad dollars because of the Presidential campaigns on TV.  These never-had-a-chance politicos will spend millions in TV advertising, moving the demand curve and increasing the price.

The next best choice for the 18-35 demographic is likely online advertising, which essentially means there’s more money chasing the same inventory – demand curve take 2 steps to the right.  So if you think you’re paying a lot for online advertising today, just wait.

However apparently there are still some companies with money to spend, with this recent email (don’t ask me why I got it, don’t ask me why they don’t have a legal disclaimer) about a couple of advertising deals for Kelley Blue Book:

——————————————————————————–
From: Melissa S. Chapman [mailto:x@kbb.com]
Sent: Tuesday, May 29, 2007 1:13 PM
To: Jean Brockmeier; Bill
Subject: FW: HP SOLD! for tomorrow’s flight
Importance: High

HP Spons on it’s way for tomorrow!

Melissa S. Chapman
VP, OEM Segment Product Strategy & Management, kbb.com
x@kbb.com
(949) 268-3048
(949) 268-3028 – fax
Kelley Blue Book
The Trusted Resource
www.kbb.com

______________________________________________
From:   Susan Brown 
Sent:   Tuesday, May 29, 2007 4:13 PM
To:     .Ad Inventory; Melissa S. Chapman; Anne Diep
Cc:     Ercy Coronel; Robin Cooper; Tim Hand; Kim Notario; Chris Buckley; Carrie Noworolnik
Subject:        HP SOLD! for tomorrow’s flight
Importance:     High

Saturn will take the open slot.

IO should be here soon.

Thanks
smb

Susan Makuch Brown
Director, Advertising and Business Development
Kelley Blue Book – kbb.com
x@kbb.com
P: 248.637.7500 ext. 5100
C: 248.840.5545
www.kbb.com

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