Just read an interesting article in Business 2.0, which I heard about via GigaOM, about the seemingly endless flow of ad dollars into popular blogging sites. It just seems so "bubble-icious" to me.
Big brands will always have sizable ad budgets to focus on “brand advertising” — which means they’re looking for (and measuring) reach and not so much conversion. But so much of the growth in online advertising has been based on conversion, where tirelessly monitored ad metrics demonstrate that the $ benefit exceeds the $ cost. I get that. This is the art of contextually targeted advertising and it works. I go to Google or Yahoo, I see ads that are relevant and it makes sense.
What I don’t get, and what reminds me of the late 90’s, is why many struggling companies are blowing ad budget on non-targeted CPM advertising. It’s like deja vu all over again (as Shaggy would say). I go to the sites mentioned in this article and I see their non-targeted (”Hail Mary?”) advertising, which is likely generating the usual 5-6 clicks for each 1000 impressions. (Then of course, it’s the matter of whether they can convert those clicks into customers/sales.) This won’t last — it can’t. Sooner or later they’ll realize that they spent $5K to generate $1K of profit.
The old adage is “I know half my marketing efforts are working; I just don’t know which half”. I believe the future of online (and offline) advertising is one-to-one and knowing exactly what is working, which is what Others Online offers. It’s my honest-to-God hope that these blog advertisers are seeing a positive ROI on their marketing dollars. If so, THAT is incredible. If not, then here we go again.
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