Online advertising rates: Rip-off or Deal of the Century?

Just read an interesting article from MediaBrains, one of our online advertising networks, titled 'Online advertising rates: Rip-off or Deal of the Century?'. Basically, it suggests that advertisers have a perception that because online doesn't have printing, paper and distribution costs, it should cost a fraction of traditional advertising. It then argues that online ads should cost the same or even more, because the hard costs are replaced by different costs, such as web designers, search engine optimization, web analytics, real-time reports, spam compliance, servers etc.

Our take on this is that it falls in the category of Deal of the Century. Consider the facts:
- online ad spending is 10% of a typical marketing budget, but has 46% impact (based on time online)
- it reaches buyers with a level of efficiency and measurability that is unmatched
- growth ranges between 30-40% (showing that it works)
- it gets interested buyers to your website better than any other method (more clicks per dollar).

Imagine, advertising that helps brand you, tells you if its working, gets you direct response, and can almost instantly be distributed to a targeted market. It's almost too good to be true. To us, that makes it a steal of a deal.

U.S. online advertising spend will reach $152.3 billion in 2007, according to the Interactive Advertising Bureau (IAB). A significant increase from 2006, so besides the market growth, there has been increases in online advertising rates. Google's rates alone have increased 30% on average with no drop off in demand. It seems the market agrees that it is a steal of a deal.

MediaBrains sums it up with 'The moral of the story is, don’t expect online advertising rates to decline. Rather, make sure you’re getting the best possible results from your efforts. Embrace the medium that opened a new channel for reaching prospects and forever changed marketing as we know it.'

We couldn't agree more. Instead of comparing the costs, compare the effectiveness.

Labels: marketing, marketing ROI, online advertising

posted by Fred @ 4:46 PM