Social Networks Sink Online-Ad Pricing
Social networks and their endlessly growing page views have dominated every sphere of the web — from audiences to ad impressions. But there’s one area where they still can’t seem to catch up: ad prices. A recent analysis by ComScore shows social networks, primarily Facebook and MySpace, have over the last year drawn an average CPM of only 56 cents, compared to the $2.43 average for the internet at large. Looking more closely, the ComScore data show that the average pricing for online ads exclusive of social-networking sites, namely Facebook and MySpace, would be much higher, about $2.99 for every 1,000 views; social sites dragged down the average online CPM by as much as 18% over the last year. Some industry executives are concerned that Facebook and its ilk may in fact be reducing the overall pricing of CPMs, or the cost-per-thousand impressions, that are the basis for online ad pricing. “Social networks are going to be a challenge for everybody, as the sheer dominance of the impressions they’re making flood the marketplace with inventory,” said Keith Lorizio, Microsoft’s newly installed head of U.S. sales. “And it’s especially a challenge for every publisher, as they drive down CPMs.” The low-cost rates on social sites don’t necessarily mean they’re driving down the pricing for other publishers. In fact, much of the collective downward pressure on ad prices could be attributed to the mass of inventory altogether — it’s supply simply outstripping demand.
Read More: AdAge
TwitVid Launches Video Ad Network
Twitter video hosting service TwitVid today launched SocialAds, a standalone video advertising network designed to help businesses connect directly with their audience by collecting followers and retweets for their advertising campaigns. “Traditional means of monetizing video has heavily relied on pre-roll ads, which work great for premium content but can be quite suffocating for an end user who may only be trying to watch a short video,” said Mo Al Adham, co-founder of TwitVid, in a statement. “SocialAds offers an alternative advertising solution, which provides measurable value to both advertisers and viewers. Through SocialAds’ proprietary technology, media viewers are exposed to social media accounts targeted to be of high interest to them. In turn, advertisers are exposed to and gain engaged customers whom, once acquired, can be communicated with as a trusted brand.” Advertisers and agencies are shifting some of their spending to online from TV, according to an April 2010 study of digital media and marketing pros by DM2PRO and Tremor Media. In fact, 94% of those polled expect to increase online ad spending this year, with almost 45% shifting those dollars from TV, the study reported. In a private beta test, participating brands generated more than 400 new followers in less than one hour, TwitVid said. As a result of seeing the commercials, 2% of viewers began following a brand, according to the video hosting service.
Read More: InformationWeek.com
Foursquare Frenzy
Dennis Crowley, co-founder of hot location-based social service Foursquare, addressed a roomful of marketers in June. He asked for a show of hands of how many had tried to work with the company but didn’t hear back. A lot of hands went up. The simple message: the still-small company is struggling to further develop its service while responding to the avalanche of requests. Now, with $20 million in new funding, agencies are hopeful the digital world’s new belle of the ball will build tools to help them use the service in deeper ways. Adweek spoke with several agencies that report frustrating experiences with Foursquare. Some have found it both hard to contact and unwilling to come up with marketing ideas. One agency representing a major package-goods client said the company put the onus on the brand and agency to find the best way to use the service. “They’re not responsive and extremely hard to work with,” said a digital agency exec who asked not to be named. “It’s hard to bring campaigns to life. Nobody knows how to create a badge or ask [Foursquare how] to enable behavior. It’s black magic.” In general, he said, “it’s pretty much unworkable.” One sticking point is Foursquare’s strategy of initially limiting advertiser participation. Pepsi, for instance, has an exclusive lock on the soft drinks category. Additionally, Foursquare has identified one “charter advertiser” for some major categories, which it then works with to better understand what works before taking on other advertisers. While less formal than exclusive contracts, it nonetheless leaves some competitors out in the cold, if only temporarily.
Read More: AdAge
