Friday, November 18, 2005
Are Internet Ad Prices Slipping?:
" Published: November 09, 2005
(After December 09, 2005, this article will only be available to eStat Database subscribers.)
Two new reports indicate that certain Internet advertising prices have declined. Is it a blip, or the start of a trend?
According to new data from Fathom Online, an SEM services and technology provider, the average keyword price in October was $1.45, a 6% drop from the preceding month. The Mortgage category saw the largest fall, at 15%, while Travel/Hospitality actually saw a 14% increase. Most categories experienced declines.
Of course, the drop might simply be a monthly aberration. Fathom inaugurated its keyword price index in September 2004, and over the first full year prices increased on average from $1.37 to $1.44, a weighted average increase of 19%.
Meanwhile, the Worldata "Fall 2005 List Price Index" shows e-mail list rental prices dropping. The list covers a year of activity, from October 2004 to October 2005, and is grouped into list categories and compares costs per thousand names for the 12-month period.
Permission-based business-to-business e-mail was the highest priced category, with an October 2005 average price of $281 per thousand. That is down $6 per thousand from a year ago. Permission-based business-to-consumer e-mail lists had an average price of $167 per thousand, a decline of $3 per thousand from October 2004. Traditional newsletter lists saw prices increase modestly, rising $5 per thousand to an average price of $175 per thousand.
Worldata analysts predict that e-mail CPMs will continue to fall due to increasing e-mail delivery challenges, including e-mail authentication, image blocking, content filtering, phishing and other standards soon to be introduced by ISPs and ESPs, which are attempting to control the flow of spam.
While the Fathom and Worldata reports suggest easing prices, other data paint a different picture. A Deutsche Bank and MediaPost survey of online ad buyers found that 40% of respondents said that prices for paid search cost-per-click ads rose up to 10% in the third quarter, while 18% saw increases of 11% or more. Only 11% said they paid less.
Prices for premium display ads were up as well, while more than half of respondents said prices for run-of-network ads were flat. Two-thirds of the executives said they paid more for impressions on home pages, vertical channels and rich media. Over one-half of respondents saw higher costs for premium inventory, with a weighted, average price increase of 7%. For run-of-network ads, the overall average cost increase was about 3%.
The majority of respondents reported increased spending on online advertising in the latest quarter, and about three-fifths said they expected to spend still more in the fourth quarter.
For more information on this subject, consult eMarketer's recently published Ad Spending Trends: The Internet And Other Media report."
" Published: November 09, 2005
(After December 09, 2005, this article will only be available to eStat Database subscribers.)
Two new reports indicate that certain Internet advertising prices have declined. Is it a blip, or the start of a trend?
According to new data from Fathom Online, an SEM services and technology provider, the average keyword price in October was $1.45, a 6% drop from the preceding month. The Mortgage category saw the largest fall, at 15%, while Travel/Hospitality actually saw a 14% increase. Most categories experienced declines.
Of course, the drop might simply be a monthly aberration. Fathom inaugurated its keyword price index in September 2004, and over the first full year prices increased on average from $1.37 to $1.44, a weighted average increase of 19%.
Meanwhile, the Worldata "Fall 2005 List Price Index" shows e-mail list rental prices dropping. The list covers a year of activity, from October 2004 to October 2005, and is grouped into list categories and compares costs per thousand names for the 12-month period.
Permission-based business-to-business e-mail was the highest priced category, with an October 2005 average price of $281 per thousand. That is down $6 per thousand from a year ago. Permission-based business-to-consumer e-mail lists had an average price of $167 per thousand, a decline of $3 per thousand from October 2004. Traditional newsletter lists saw prices increase modestly, rising $5 per thousand to an average price of $175 per thousand.
Worldata analysts predict that e-mail CPMs will continue to fall due to increasing e-mail delivery challenges, including e-mail authentication, image blocking, content filtering, phishing and other standards soon to be introduced by ISPs and ESPs, which are attempting to control the flow of spam.
While the Fathom and Worldata reports suggest easing prices, other data paint a different picture. A Deutsche Bank and MediaPost survey of online ad buyers found that 40% of respondents said that prices for paid search cost-per-click ads rose up to 10% in the third quarter, while 18% saw increases of 11% or more. Only 11% said they paid less.
Prices for premium display ads were up as well, while more than half of respondents said prices for run-of-network ads were flat. Two-thirds of the executives said they paid more for impressions on home pages, vertical channels and rich media. Over one-half of respondents saw higher costs for premium inventory, with a weighted, average price increase of 7%. For run-of-network ads, the overall average cost increase was about 3%.
The majority of respondents reported increased spending on online advertising in the latest quarter, and about three-fifths said they expected to spend still more in the fourth quarter.
For more information on this subject, consult eMarketer's recently published Ad Spending Trends: The Internet And Other Media report."
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