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ONLINE ADVERTISING: WINNERS AND LOSERS

Biz tidbits from the Internet, blogs and podcasts

Perhaps because a Jan. 2 report by JPMorgan Chase on Internet stocks ran 312 pages, it took a while for many bloggers to digest it. "Nothing but Net," written by Imran Khan, a stock analyst, and his team at the investment bank, predicted that Internet stocks were in for a great year, thanks in part to higher earnings, wider adoption of broadband, growth in e-commerce and growing revenues from online advertising (jpmorgan.com; full link available at nytimes.com). It was the point about online advertising the caught the eye of several bloggers. The cost of ads per 1,000 viewers "bottomed out" in 2007, averaging $3.31, according to the report. This year, it predicted, ad rates will start to rise, reaching $3.86 by 2011. Dave Morgan, the executive vice president for global advertising strategy at AOL, is a bit more cautious than Khan. Advertising rates may rise generally, he agreed, but there will be winners and losers. The winners will be "premium branded content sites" and social networks like Facebook, he wrote on MediaPost's Online Spin blog (blogs.mediapost.com). Also positioned to do well are "small and niche content sites" that sell ads through networks and platforms like FM Publishing or Google AdSense, which "all do a better job providing marketers with targeted access to these sites." The losers, he wrote, will be "virtually all undifferentiated graphical ad inventory, particularly on big sites and portals." That is because "the shift to ad networks, sophisticated forms of audience targeting and performance optimization has commoditized this inventory," he said. "It used to be that these sites could get premiums for just delivering tonnage, but no more." This week, Jupiter Media released a report predicting that local online advertising will grow 13 percent from 2007 to 2012 - outpacing online ads as a whole (jupitermedia.com). Janet Meiners of Marketing Pilgrim wrote there is still "a bit of a learning curve" for small businesses, but they are learning quickly (marketingpilgrim.com).

Could this yearbe another 1929?

Michael Kitchen of Marketwatch.com recently noted the number of pundits who have harked back to "Black Monday" of 1987, warning that we may be in store for a similar market collapse. But Kitchen thinks a different year might make for a better analogy: 1929. The comparison is even more apt given the fiscal stimulus package being hammered out in Washington, Kitchen said. He lists a number of similarities between then and now, but concludes that "our economy now has far more differences than similarities with the economy of 1929, and few expect a new Depression for the decade ahead." "But it's also worth remembering that the best-laid plans of presidents, chief executives and senators can sometimes come to nothing."

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