Interesting bit of information!
11/03 18:17 Online advertising rates are falling, survey shows
By Andrea Orr
PALO ALTO, Calif., Nov 3 (Reuters) - Although advertising on the Internet is becoming a popular promotional tool for more and more businesses, online advertising rates are actually going down, a new survey shows.
Internet advertising rates in September fell to their lowest since last December, when it started tracking such data, the software company AdKnowledge said Tuesday.
AdKnowledge, a Palo Alto, Calif. business that makes online advertising software, says the dip partly reflects a surplus of online space relative to advertiser demand. In other words, the number of businesses advertising online is growing, but the number of Web sites that are looking for advertisers is growing faster.
Online advertising is the primary source of revenue for many Internet businesses, including popular directories like Yahoo! Inc., which do not sell any products to consumers but offer ad space on their Web sites. One strategically placed "banner ad" running along the top or bottom of a popular Web page can be seen by millions of viewers in a single day.
Still, the failure of advertising rates to show any substantial rise during a time when Internet use has exploded, could suggest businesses are getting smarter about the value of online advertising, rather than just throwing money at the Internet.
"Rates may have been artificially high to begin with," said Michele Schott, director of marketing communications at AdKnowledge. "I think everybody is just feeling their way."
The survey showed Internet advertising rates in September fell to $36.29 CPM or cost per thousand. Online advertisers pay the host site a rate based on every thousand times their ad is seen.
The September rate compares to $37.84 CPM last May, and $37.21 CPM last December.
AdKnoledge officials cautioned against reading too much into the average advertising rates, since they fluctuate widely from site to site. It said certain technology and computer Web sites were commanding CPM rates of more than $75, while other lesser-known sites sold ads at a CPM of less than $1.
Travel-related Web sites showed a sharp increase in ad rates over the past few months. CPM on sports sites was little changed, and shopping sites showed a slight decline.
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