Internet Advertisting Costs Dropping?

There is a very informative article on eMarketer today regarding the indexes for online advertising and email list rentals. Reporting the results of several indexes for the online ad world, the article “Are Internet Ad Prices Slipping” gives mixed data points for marketers.

According to Fathom Online and Media Post’s November 2005 study:

• Paid Search Keyword Prices fell 10% for Consumer Services ads and 6% for Consumer Retail products.
• Paid Search Keyword Prices rose 14% for Travel/hospitality ads and 4% for Finance/Investment ads

Worldata reports the costs for rented email lists is slipping as well with Permission based B2B email lists dropping 2%, Newsletters dropping 3%, and Permission based B2C email lists dropping 2%. (With the poor response rates of these offerings it is amazing that any competent marketer still uses these on a regular basis. See our article on how Cisco drove registrations through the roof for actual response rates using rented permission based B2B lists.)

According to a Deutche Bank/Media Post study, paid search costs/click actually increased 10%.

Good news bad news… From our perspective it appears that B2B pay per click campaigns are getting more expensive as organizations are learning how to use these tools to drive lead generation traffic. B2C marketers are facing an already crowded page and are using other tools to differentiate themselves since they do not want to appear on the second or third page of search results. (For example many consumer oriented advertisers are launching features such as the short movie clip or the flash intro on Yahoo’s home page.)

Internet advertising is still a no brainer. Tailoring your mix to include options other than paid search is important as the B2C marketers continue to show us. B2B will eventually learn the same thing and move to more interesting and effective ways to advertise online.

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