• Ross Fadner, Jan 26, 2009, 12:15 PM
  • CPM Prices Falling Precipitously Advertising Age Several factors are at work driving down CPM prices, Advertising Age reports. For starters, the economy is tanking, and advertisers are cutting back on their brand campaigns, which includes display ad spending. Then there's the expanding glut of online inventory that's putting further stress on prices and making it even harder to monetize content.

    According to unnamed sources on both the buying and selling sides, cost-per-thousand ad impressions for online publishers are about 20% this year, and whereas publishers used to unload 60% of their inventory, some now sell only 30%. And the low end of the market has gotten cheaper: according to an August study from the IAB and Bain Capital, the average CPMs on ad networks ranged from 60 cents to $1.10, prices that are only 6% to 11% what publishers could get from selling inventory directly. And CPMs for ad-network-sold ads are dropping, some by as much as 50% year-over-year, says a recent study from Pubmatic, which tracks pricing among long tail ad networks.

    These price drops also affect the cost of higher-end ad impressions, the report says: as remnant inventory gets cheaper, there's less of a reason for to uphold rate card prices when a client demands a discount. As IAB CEO Randall Rothenberg laments, media agencies tend to buy the web like TV, using reach and frequency modeling to get volume. This is fine, he says, but these advertisers aren't paying for it the same way. "They say they want mass reach, scale, reach and frequency, but they want to pay for it as they pay for (direct response) -- only if a sale is made," he said. Read the whole story...
  • Analysts: EBay Prepping Skype For A Sale The (London) Times The (London) Times reports that eBay is getting ready to sell Skype, the Voice Over Internet Protocol provider purchased by the Web giant for $2.6 billion four years ago.

    Industry watchers believe that CEO John Donahue signaled eBay's intent to sell during the company's fourth quarter earnings call last week. Donahue described Skype as a "great stand-alone business", admitting that, "the synergies between Skype and the other parts of our portfolio are minimal. We're going to continue to run and operate the business. It's not a distraction currently. And at such time when we have further announcements on that, we'll let you know." Those comments immediately sparked rumors that eBay would sell. Said MorningStar analyst Larry Witt: "If someone's willing to pay the right price, I don't think (eBay) would have a problem selling it...I think they made it clear it's not a core part of their strategy going forward."

    Jack Murphy, an analyst for William Blair, agreed. "It's important that eBay has opened the door to a buyer by talking about Skype as a stand-alone business. It would be best for eBay to get whatever cash they could for it and focus on their struggling core marketplace business." Possible buyers include Google, AT&T and Verizon, the analysts said. Read the whole story...
  • Q1 Better Than Expected For Some Mediaweek Despite the doom and gloom in the overall economy, the first few months of 2009 are shaping up to be better for the online advertising market than the gloomsters once predicted. That said, many businesses have reported slowdowns, especially as a result of pricing pressure in the ad networks space, "but the abysmal first quarter that many anticipated...hasn't happened," Mediaweek reports.

    "I was one of the people that thought Q1 would be disastrous, but so far it's not that bad," says Jim Spanfeller, president and CEO of Forbes.com. "Things have been OK. It's not the nuclear winter we feared."

    Even so, there's still a good amount of uncertainty, especially for advertisers. "What's different about this year versus last is that we had a lot more knowledge about what was going to happen the rest of the year. Instead, this year many brands are unable to plan long term," said David Rittenhouse, media director, Neo@Ogilvy. Mark Kahn, CEO, of Traffiq, agreed. "'Let's plan 2009' is gone. Now, it's mid-January, and buyers are saying, 'Let's plan February.'" Read the whole story...
  • How To Get Funding In This Economy Los Angeles Times In a down economy, venture funding usually dries up pretty fast, but the Los Angeles Times talks with two local companies who just managed to raise the cash. Gamervision, a social networking site for video gamers, announced a $5 million funding round on Friday. President Andrew Reisini said the trick was to avoid venture capital firms, hitting up angel investors and others who had already invested in the company's first round instead.

    "In this atmosphere, it is very, very difficult to deal with any sort of institutions whatsoever," Reisini said. "We would advise people to look within the group of people already involved with the company." That includes Mom, Dad and other friends and family members. As Reisini says, it's hard for investors to find safe havens for their cash these days. As such, they're staying away from startups, which are considered risky investments.

    One way to lure investors, say Julia Johnston and Ariel McNichol, co-founders of startup mEgo, is to pinch pennies. The pair was able to raise $2.5 million last Wednesday for their service, which aggregates social networking profiles using avatars, after cutting employees in October. "You have to prove that your burn rate is low, that you're really pinching your pennies," Johnston said. mEgo is planning to break into the booming virtual goods space. Read the whole story...
  • Web Series Fail To Stick With Users, Advertisers Advertising Age It's a vexing problem for Web video producers: How do you build a loyal audience and keep it coming back? As Advertising Age's Michael Learmonth points out, in the short history of the Web series, producers have struggled to replicate the TV model where audiences come back and even build from the first episode. "Online audiences are spotty, fickle and distracted," says Learmonth, and "even the best web series have trouble getting numbers when they're not getting front-page promotion on a major video portal such as YouTube or MySpace Video."

    To illustrate that point, Ad Age asked Web analytics firm TubeMogul to compile a study showing stats for the first eight episodes of the 50 highest-profile Web series available on top video destinations like YouTube, Dailymotion, Metacafe, MySpace, and Yahoo. The results showed a whopping 64% decline on aggregate of the Web series' audience from the first to the second episode. The decline becomes less steep from there, says Learmonth, but it only goes to show that the reason most series don't make it past the tenth episode is that, by that point, there often isn't much of an audience left.

    For example, Michael Eisner's production "Prom Queen" went from 405,000 views after episode one to a mere 38,000 for episode two. Brand marketers, of course, want to see guaranteed audience sizes, which means that producers need a better strategy than the "post and spray" approach in the hope that their video goes viral. That means paying for real distribution, instead of buying placement for a limited time on YouTube's homepage. Read the whole story...
  • The Revolution Comes To Facebook The New York Times Read the whole story...
  • ChaCha Raises $30 Million TechCrunch Read the whole story...
  • Twitter To Raise Funds At $250 Million Valuation TechCrunch Read the whole story...