In the early days of the internet, companies would pay an average of $35 to display their banners on websites for 1,000 impressions. Back then, advertisers enjoyed click-through rates of about 15% on their banners. Today, the average click-through rate has plummeted to a mere 0.5%. Despite this drastic decrease, the average cost of banner impressions has not seen a similar decline. This article explores the changing landscape of online advertising and the increasing demand for guaranteed results.
Major websites rely on banner revenue to continue operating. As long as there are big advertisers like IBM and Dell who can afford these inflated prices, the costs will remain unrealistic. The banner market began to drop drastically, leading to claims that the banner industry was dead. With an average click-through ratio of only 0.5%, advertisers could not afford the steep price for banner impressions. Similarly, websites selling banner ad space could not afford to sell banner impressions at a discounted price.
Advertisers turned to other means of advertising such as ezines. Ezine advertising took off a few years ago, but even the enthusiasm for this advertising medium has since then leveled off as readers started becoming immune to the print ads or sponsor messages.
Advertisers no longer want to pay for unguaranteed results. They want to pay only for performance. Companies that provide advertising are now realizing that selling advertising is not a one-way transaction anymore. Companies have to become partners with their advertisers if they want to truly succeed.
Many advertisers submit poor copy, leading to poor performance in ezines. By offering to critique and improve advertisers' classified ads, companies can help ensure better response rates. This not only differentiates the ezine from others, but it also shows customers that the company cares about their results.
In 2001, the price of running an ad in Cool Cash Ezine was raised, but the number of classified ads was reduced to a maximum of five ads per issue. A certain amount of click-throughs was also guaranteed depending on which sponsor ad the advertiser purchased. By guaranteeing results, companies can assure advertisers that they will assume some of the risks of the ad and ensure that they receive a certain amount of clicks.
Pay-per-click search engines are a prime example of websites that offer pay only for performance. You only spend money when you get results. Using search engines such as Goto.com, you could literally bring thousands of visitors to your website for as little as a penny per click.
The reality of internet marketing is that companies will have to increase the guaranteed number of click-throughs as time passes. Advertising should be a full-fledged partnership where both parties end up happy. If you do not differentiate now, then you will surely be out of business in the future. If you provide advertising for customers, show them the results. If you are an advertiser, don't spend another dime until you see results!
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