Online ads: it's a buyer's market

The global recession that has hammered stock markets around the globe continues on. Some people are even seriously referring to the 'D' word.

This hasn't been good news for businesses relying on advertising dollars. Advertisers are cutting budgets and for some ad-supported online businesses, that means cutting back on services, cutting back on staff and trying to come up with new business models.

There's only one way to describe the current situation when it comes to online ad sales: it's a buyer's market.

The evidence of that isn't too difficult to spot unfortunately. It's literally hanging out in plain view on many websites. As points out, the 'belly fat' ads that almost anyone who spends any amount of time online has probably come across are evidence of this.

Facing a situation where there's far more inventory on the market than demand, online publishers are being far less discriminating about who they sell ad inventory to. It's not that they don't care about the quality of the ads they show their users; it's that many simply don't have a choice. Publishers just can't afford to leave money on the table.

That weak ad market is providing a huge opportunity to advertisers who are still willing to spend. And increasingly those advertisers are the companies pitching dieting products with the most unflattering ad creative possible.

The Rubicon Project estimates that 50% of ad networks are now serving varying forms of the belly fat ads and that amazingly, these ads supply some ad networks with up to 30% of their total revenue.

Those figures, if accurate, explain why it'd be so difficult for ad networks and publishers to turn down these placements. Even the top-tier news site is showing belly.

When it comes to belly blocking, that's difficult to do too since many ad networks use other ad networks to supply ads when they have no ads of their own to place in rotation. Call it trickle down economics for the internet economy.

By making sure their belly fat ads are placed on just about every network, the companies behind them can usually find a way to make sure they their ads trickle down through the networks onto websites.

Of course, the rise of the belly fat ads reveals a truth that many digital marketers don't want to face: direct response ads produce. Even though the belly fat ads lack all taste, one ad network CEO told the inconvenient truth: "a lot of people click on those ads, quite frankly".

Everybody loves the money big brands bring when times are good but online display ads simply don't deliver enough ROI to justify heightened spend when times are bad and selling matters more than branding.

Which leaves the world of online display advertising to the companies that make lots of money and who don't look very good doing it. That's unfortunately what happens when a seller's market makes publishers fat. When a leaner and meaner buyer's market comes knocking, it's trouble.


Topics: Customer Experience
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Reader comments (1)

  1. Avatar-blank-50x50 joe

    3:01PM on 11th March 2009

    interesting angle , its a bit of a coincidence when in a recession the fat needs to be trimmed the (under)belly fat ads appear

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