Prices for banner ads dropped eleven percent across 270 ad networks last quarter, a new report by ad-matching company The Rubicon Project shows. It’s hardly surprising that this form of online advertising is getting hit by the economic downturn. While search engine ads can demonstrably make advertisers money due to users doing things like clicking through to buy products, banner ads are aimed more at generating brand recognition — and TV still does that better, as far as the largest advertisers are concerned.
The caveat is that prices for these so-called CPM (cost per mille) ads have been dropping, anyway, even as revenue has increased for many publishers. The reason: Growth of content available to serve ads on has outpaced the amount of ad dollars to place on the content. Still, as the report notes, downward trends are showing themselves in verticals, including Entertainment, Music and Young Adult. See the graph for more.
Analyst projections are also being altered down. A new report out today by JP Morgan shows U.S. display ads seeing 25 percent growth this year and 13 percent next year, down from the firm’s September estimates of 28 percent growth this year and 19 percent growth next year. Display ads, however, are now projected to grow six percent next year, to $8.45 billion, versus a previous forecast of $9.43 billion, or 16 percent growth.
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