Business Week: Online advertising price revolution or will come

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Introduction: "Business Weekly" published analysis of the article today, that Google, Quantcast and other companies brought about by the network visitor classification and target locking technology is making the cost of online advertising greatly reduced, and threatening the interests of web publishers, online advertising is about to appear a price revolution. The following are the main contents of the article:

Over the past decade, web publishers have relied on traditional advertising models, where publishers offer advertisers content, and the more readers need it, the higher the fees for online publishers. For example, the web publisher WSJ.com (Wall Street Journal) has a 64.60 dollar charge for viewing a banner ad for thousands of people (in terms of advertising, called CPM, which is the cost per thousand). In the past, such fees were justified, as the Wall Street Journal readers were the perfect target audience for high-income groups and high-end brands. The higher the audience level, advertisers are willing to pay a higher price for advertising space.

But what if advertisers use new avenues to cover the target audience and charge far less than 64.60 dollars?

Site visitor collation and target lockout (targeting)

Online publishers face severe revenue pressures as many companies become more mature in judging visitors ' backgrounds, what sites they visit, how much time they visit, and how advertisers are cutting advertising spending. Traditional advertising patterns are increasingly being hit by comscore, Quantcast, such as Internet traffic monitoring agencies, which focus on so-called audience statistical collations (demographic profiling) (identifying the type of user that browses each site) and the targeting of visitor behavior ( Behavioral targeting) (based on visitor's previous network browsing behavior, for advertisers to cover the needs of the audience).

Advertisers can use these tools to dramatically reduce advertising costs. For example, if a company sells luxury goods called "bidgets", it usually advertises on fancyoldsite.com, covering people with a population of more than 150,000 dollars a yearly income. This kind of advertising is more expensive, such as CPM for 60 dollars, but it can cover the company's ideal audience.

But the company can build a code in Fancyoldsite.com's banner, called Cookies, that is stored on every user's computer that browses to the ad, so that the company can track when the user browses to another site, creating a target lock. Every user who has browsed the company's ads in Fancyoldsite.com will pop the "bidgets" banner once they browse other sites. Banner ads can reappear because of the "network" that marks thousands of targets for the cookies on this computer, in other words, "demand-user regression," a new ad that is cheap and CPM is only 3 dollars, but it can cover the same audience.

Google DoubleClick

Thankfully, the company has just used behavioral targeting to reduce the cost of advertising from CPM to 3 CPM, saving 95% of its expenses. John Ardis, vice president of corporate strategy at ValueClick, an internet advertising company, John Adis that the target audience for the network has been locked for more than 10 years, but in the midst of the economic crisis, the parties have been interested in it. "It is clear that the existing economic environment has made advertisers look for more effective things," he said. "In fact, this kind of advertising is not only low cost, but also usually better effect." ValueClick provides target re-locking services, which the company says is 110% to 840% more clicks than the average ad, because the ad-covered audience is more interested in the advertising product or service.

Google is using its 3.2 billion-dollar takeover of DoubleClick to enter the target market, which uses data from millions of users to place more relevant ads. Google's return is very rich. For now, Google accounts for less than 2% of America's online-display ads, but accounts for 63% of the U.S. search market.

Website Statistics Service provider Quantcast has brought about a breakthrough revolution in consumer targeting. Organizations such as comscore use groups of people, small groups of representatives to assess the audience, but quantcast through cookies to track the media habits of more than 900 million users around the world, 6 billion direct monitoring every day, and then The company uses mathematical models to track consumers in millions of web sites to determine the relevant data, for example, to determine the age of a user between 35-44 years old, family income of 100,000 U.S. dollars. This data does not need to be determined in one place, that is, the individual user's name and address are not collected, but this size data allows advertisers to have a clear understanding of the type of visitors to each site. This method is still relatively novel. Quantcast launched a direct-measurement data service in 2006 and quickly extended it to new publishers and key advertisers such as Dell, Procter and Gamble and Capital One Financial.

But this creates friction. For example, if you are an advertiser and have a list of the most demanding audiences to browse, you will be looking for new ways to cover these audiences instead of advertising on wsj.com, businessweek.com or the New York Times website. In response, ValueClick, vice president of corporate strategy Adiss, said, "If I need 4 dollars, why do I have to pay 60 dollars?" So this brings a counterattack, and newspapers and magazines have a lot of opinions. ”

Publishers use data to fight back

But publishers do not have to go the way of newspapers, and they can take advantage of new customer data. "User data will give them new, more innovative ' sell ' audiences," said Adam Gerber, chief marketing officer at Quantcast. Adam Gobor. For example, if a website visitor 80% is male, in the past, the site may only attract advertisers who want to cover a male audience, and some advertising space can not be sold. But with better data on readers, the site can sell 20% of its remaining advertising space to advertisers that attract women. ”

Christine Peterson, president of the New York 212 Interactive Advertising Association, Christina Peterson that publishers are capable of self-defence under current conditions. For example, if these publishers can anticipate their readers ' readiness to buy product services from advertisers, they will be able to charge an extra fee for advertisers. Patterson said, "The reason is very simple, I visit a financial site does not mean that I am prepared to listen to the investment advice of credit (Charles Schwab), but if I have been browsing various financial websites for many times, can I charge you more for credit management? Of course. ”

Behavioral target-locked new data also stimulates the demand for online advertising. "One of our advertisers is launching a low-carb loaf of bread, while Atkins and South Beach two companies are rage to lose weight products, and their target audience is female," said Adiss, vice president of ValueClick business strategy. But the result is that most of the people to buy are 40-year-olds because they want to be no longer portly. , he added, and The Advertiser began to put more ads in to cover the newly discovered male audience.

As a result, web publishers want to survive. What you need to do is find out which readers you haven't "sold" and "sell" them to advertisers who have not previously covered these groups, and use the reader's "click Streams" on other sites to help advertisers cover the consumers who are most interested in their products.

All in all, for publishers, the audience data is waiting for the advertisers to thirst. But publishers should step up because the price of traditional online advertising business models is falling fast.