The data, which are derived from SQAD's reports for individual media, which are based on actual transaction data supplied directly by advertisers and agencies, found that online display ad costs have fallen 13 index points in the third quarter of 2010 from the second quarter of 2009, when they were benchmarked at an index of 100.
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SQAD's analysts did not speculate on the reason for the declines, but they correspond to the rampant rise of display advertising networks, real-time bidding exchanges, and so-called demand-side platforms that have driven some advertising budgets away from publishers' premium advertising sales toward secondary markets where similar inventory can be bought for a fraction of the price.
But that doesn't' explain why the costs of national TV media, especially the major broadcast networks, as well as cable TV networks, are also languishing.
Ad prices for the major broadcast networks have also fallen 13 index points from their second quarter 2009 benchmark, while cable network ad prices have declined four index points during the same period.
Whatever the cause, the data indicate that while total advertising revenues continue to improve, significant advertising price deflation appears to be occurring across the major national media. Four SQAD databases were used to analyze the changes from baseline Q2 2009 through Q3
Media | SQAD Source | Q2,2009 | Q3, 2009 | Q4, 2009 | Q1, 2010 | Q2, 2010 | Q3 2010 | |
Internet Display Ads | WebCosts | 100 | 98 | 103 | 99 | 95 | 87 | |
Spot TV | Spot TV | 100 | 101 | 107 | 93 | 107 | 109 | |
Spot Radio | Spot Radio | 100 | 98 | 100 | 96 | 101 | 103 | |
National Broadcast | NetCosts | 100 | 86 | 89 | 85 | 103 | 87 | |
National Cable | NetCosts | 100 | 86 | 97 | 77 | 98 | 96 |
The supply / demand side of the equation would account for the variances. Spot TV prices jumped for marketers as inventory was swallowed up by political spending.
The dynamics of the web, on the other hand, are being forced by DSPs where ad networks and long tail publishers are dumping inventory into them. Witness the cutbacks in sales reps at the ad exchanges.
The exception to this is the top tier publishers / portals that are holding up better than the SQAD averages imply.
Paul Benjou
Ad Blog: www.MyOpenKimono.com