Online Ad Prices Keep Going Up, But Is It Sustainable?

from the bubblewatch dept

Tue, Dec 26th 2006 9:12am — Carlo Longino

Perhaps one of the bigger signs that another bubble is growing is the persistent reemergence of companies and ideas that didn't survive the first bubble, such as the "free stuff (with ads)" business model. Seeing this sort of thing become pretty commonplace again points to the growing strength in online advertising for publishers and content owners: plenty of technological and commercial advancement (like Google AdSense) has been made in the space since the last bubble, while advertisers are throwing more and more money at online ads. However, with ad prices rising, some are wondering if web site owners and publishers might overestimate that strength and jack up their prices even more -- a move that could presage a correction or collapse of the ad-driven business model. Questions are already emerging about the amount of traffic sites are claiming to advertisers, and without solid data to back up online advertising, ever-increasing prices may not be sustainable. In some sense, advertising is to this bubble what VC money was to the last one, and if the massive inflow of money gets cut off, for whatever reason, things could get ugly.

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4 Comments

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Elohssa, 26 Dec 2006 @ 10:50am

Well...
...if we haven't reached critical mass for porn, what chance do advertisers have to overload us?
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Lazerus King, 26 Dec 2006 @ 10:54am

I think...
With my trusty Google pop-up blocker no chance!
Unless Google decides not to block "sponsored" ads.
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Brian, 26 Dec 2006 @ 10:58am

Hmm
This ecosystem is much more dynamic than the last. The ad buys of '90s bubble startups were fueled largely by VC money (as you said) and bartering with other doomed startups in the name of getting enough traffic to prop up a case for IPO. Plenty of banner-centric blind spending.

These days there is real ROI being realized through current advertising, more dynamic and granular control of ad buys. I'm not sure you have a point here.
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William, 26 Dec 2006 @ 11:45am

Ad Block Plus
I use the Ad block Plus plug-in for Fire Fox and Google pop-up blocker. I almost never see ads online. The only time I ever see any is when it is embedded in video I want to see.
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