The economic struggles due to a weak dollar and the complete failure of the White House, Congress, and the Federal Reserve to restore its value means, for advertisers, a need to find other outlets for their messages.

The effectiveness and efficiency of online advertising puts the Googles and ad networks of the world in position to enjoy a mini-boom while other parts of the economy languish.

Once Google brought out its Q1 2008 numbers that wiped away any concern about ad click activity, the die appeared cast. If advertisers would spend, they will spend online.

The New York Times said marketers want options besides portal display advertising, a balliwick for sites like Yahoo and AOL. Vertical ad presence, not broad portal displays, means better targeting, and favorable ad rates:

The reasons ad networks are thriving are price and improved technology. Ad networks charge much lower cost per thousand ads served (known as CPMs), as low as $4 on an ad network with some targeting, compared with $40 and up for some ads on premium sites like MSN or Yahoo.

“While the home pages are still very effective media buys, the price tags on them have become a little outrageous for many advertisers. For all the growth that has gone on from a site standpoint, there are other ways to amass that type of audience fairly quickly that are more efficient,” said Margaret Clerkin, the chief executive of Mindshare Interaction, a media-buying firm.

Such efficiency does not bode well for portals trying to sell a top-right home page placement in front of a too-broad audience. Tomorrow afternoon should be interesting when Yahoo reports its Q1 numbers.

Posted on Monday, April 21st, 2008 at 12:04 pm. Permalink