May 21, 2008

A Banner Day (Not)

On September 21, 2007, in a post called The Backlash Will Come we wrote the following:

It's not going to take advertisers long to figure out that on-line display advertising has been a failure as an interactive medium (see Two In A Thousand.) It can't sustain its growth for long with a response rate under 2 in a thousand unless it's willing to take big cuts in cpm... It may not be this week or this month, but it's coming.

Guess what? According to The New York Times on Monday:

...there are signs that the growth in online advertising — particularly...display ads — is slowing down... The prices paid for online ads bought through ad networks dropped 23 percent from March to April, according to PubMatic...Large Web publishers fared the worst in PubMatic’s study, with the prices they received through networks dropping 52 percent.

Remember, my little ones, regardless of what the online zealots tell you, the laws of economics have not been repealed.

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