Innovationinonlineadvertising
MadMenarewatchingyou
Howreal-timebiddingwillaffectmediacompanies
YOUarebrowsingforlampshadesonadepartmentstoreswebsite. Yougrowbored, andsurfacrosstothewebsiteofyourfavouritedailynewspaper. Mysteriously, thelampshadesfollowyou: anadvertisementforthesamebrandappearsnexttothearticleyouarereading. Welcometotheworldofreal-timebidding, aclevererandnosierwayofsellingadvertisingthatisbeginningtoshakeuptheonlinemediabusiness.
Adecadeagoonlinedisplayadvertisements, orbannersastheywereoftenknown, werebooming. Companiespaidhugesumstoappearonnewswebsites. But, asthenumberofadsincreased, peoplestoppednoticingthem. Now, forevery 1,000 displayadsthatpopup, lessthantwoareclickedon. Priceshaveslumped. Somemediafirms, notablyNewsCorporation, haveconcludedthatonlineadswillneverbringinenoughmoneytosupportanewspaper. Meanwhilesearchadvertising, whichreachespeoplewhentheyseemtobeinterestedinsomething, hasgrownfrom 1% ofAmericanonlineadspendingin 2000 toalmosthalf, turningGoogleintoa $172 billioncompany.
Conventionaldisplayadsaresimplywasteful, saysJakobNielsenofGroupM, alargemediabuyer. Sayacompanywantstoreachyoungmen. ItmightbuyadsonthesportssectionofalargeportalsuchasYahoo!. Butitwillalsobepayingforthewomenwhovisitthatpage. Ifitalsobuysadsonthesportssectionofanotherlargeportal, suchasMicrosoftsMSN.com, itwillpaytwiceforthepeoplewhofrequentbothwebpages.
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