Report: "Tower" Ads Proliferating, While Banner CPMs Slip
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A new report by Jupiter Media Metrix suggests that while Web publishers are increasing the number of vertical "tower" banner ad placements, the new units' ROI for advertisers is still unproven.
While the study said that the inventory of vertical ads increased nearly 70 percent during the fourth quarter of 2000, towers' average rate card price was about $54 CPM -- almost twice as much as standard horizontal banners' $28 CPMs.
The number of unique vertical banner ads increased from 2,809 to 4,725 during the fourth quarter, according to Jupiter's AdRelevance unit. Additionally, vertical ads represented 20 percent of all 1.9 billion total ad impressions delivered during the quarter, while 36 percent of the quarter's impressions came from standard banners.
While towers command a sizable CPM despite growing inventory, the opposite is true for the standard banner ad. According to the AdRelevance data, the average banner rate card price actually slipped from $31 to $28 CPMs during the fourth quarter.
Jupiter analysts attributed the rate decrease, in part, to an increase in banner inventory, combined with a decrease in response rates -- dissuading direct marketers from spending money on online ad buys.
"Typically we see a surge in holiday-related advertising during the fourth quarter which results in greater demand and higher ad rates across the board," said Jupiter analyst Christopher Todd. "The fallback in average banner pricing exemplifies the serious concern which is affecting the marketplace."
It's important to note that the Jupiter/AdRelevance report is based entirely on rate card prices -- which could be heavily discounted in practice, making the actual state of affairs worse than Jupiter is reporting. In fact, a sales director for a top-50 Internet property (based on Jupiter Media Metrix's own rankings) told internetnews.com's Internet Advertising Report that he regularly discounts his banner inventory by as much as 90 percent.
Because of that fact, the proliferation of towers are indicative of publishers' efforts to woo new advertisers with sizes other than the ubiquitous -- and increasingly out of favor -- banner ad, analysts said.
"Publishers are clearly experimenting with new and larger ad sizes in an attempt to increase online advertising revenues in what is undeniably a soft market," said Jupiter's Todd. "However, bigger ads don't necessarily mean better results for advertisers -- especially over the long term. A great deal of work still lies ahead to unilaterally identify and communicate the true value proposition of online advertising as a medium."
The study suggested that incentive sites, general news sites and politics sites were among those that increased rate card prices during the fourth quarter. Meanwhile, computing and technology sites had the highest rate card value for banners -- $50 -- though that figure is $5 lower than in the previous quarter.