Bonatti, working with Yale University economics professor Dirk Bergemann on this research, says "... newspapers have a very limited ability to target audiences... specialized magazines can do better... Google has a very good ability to target who's browsing each page... (though) online advertising has the potential to drive out traditional advertising, it does not necessarily follow that online advertisers will make more money... "
Bonatti continues, "...as technology keeps improving, more and more web sites can sell very narrow products to very specialized audiences... with lots of people targeting the same audience the profits to be made through specialized advertising become more and more spread out... instead of competing for one large pool... you will have price war in each targeted segment as the slice gets more and more narrow."
Bonatti concludes that, "... the better the technology, the lower the profits for advertisers... "
And MarketingVox data suggest that Bonatti's findings take on greater relevance as vertical and hyper vertical ad networks continue to proliferate. Recent statistics and funding projects are a continued testament to the strong momentum of vertical ad networks' industry-specific approach to placing and distributing ads.
According to Adify's Vertical Gauge for Q3, brand advertising CPMs for various verticals continue to rebound from their depressed state in early 2009. Food CPMs are up 91% from the previous quarter, Real Estate CPMs are up 17% from Q2, and another top performing category is Entertainment, where CPMs grew 8% between Q209 and Q309. However, Both automotive and healthy living and lifestyle verticals contracted substantially this past quarter. According to Adify, may be more of a reflection of economic trends than a vertical ad platform strategy.
Vertical Brand Advertising CPMs, 2009
Beauty & Fashion
HealthyLiving & Lifestyle
Moms & Parents
Source: Adify Vertical Guage, December 2009
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