Online ad revenues: Is the slump over?

Q1 2009 was abysmal, as far as online advertising revenues were concerned. Have things changed?

I didn’t wake up one day and decide to be an advertising salesman. I certainly never expected to run ads for a network of sites. No, my expansion into the world of online advertising was by chance. When someone waves a large chunk of money in your face and asks you to take it, you don’t say No. You find out how to earn it.

That was how I started. An advertiser wanted to place ads on the Kobold Quarterly website – more ads than I could handle. I didn’t want to turn down the money, so I had to find sites to put those ads on. That’s how it’s been ever since. My expansions come when I outsell my inventory. Necessity is the mother of expansion, at least in my case.

The first nine months went well. The average effective CPM (eCPM) across all the site in my network was $2.00 – and that includes wasting 30%-50% of our inventory on AdSense. Come the New Year, though, it was a new game. Nobody – at least nobody I was talking to – was buying ads. Our eCPM dropped to $0.50 and I was not happy; neither were the owners of the websites I represent.

Since late April, though, there’s been an explosion in advertising. This month, 87% of the impressions on my sites are sold, and we’re looking at $2.50 average eCPM. No warning came, only requests for advertising space.

So what’s changed? Will the online advertising market continue to weaken, or will marketing budgets recover soon, and with them the size and frequency of online advertising purchases.

I don’t know.

It’s a fun industry, though. If I ever figure out the whys, behind the whats, I’ll let you know. In the meantime:

(1) If you use online advertising services, which do you use?

(2) How’d your average eCPM change recently?

(3) How do you diversify to guard against sudden network failure in a commodity market.


Leave a Reply