Category: Technology Author : Duncan Riley Posted: January 14, 2009
Tags : blog advertising, blogging
The predictions of a massive downturn in web advertising due to the US recession started last year. Gawker Media’s CEO and Founder Nick Denton, one of the smartest men in blogging and a guy I’d never tell anyone to ignore, predicted a 40% downturn in web advertising this year.
Let me say that I think, sadly, that his prediction may be right.
Our own ad provider has dropped so much inventory this month it’s scary. As others have suggested, the worst of it was always going to be January; Q4 2008 ads were booked in advance, Q1 2009 were directly influenced by the recession, hence the lower spend.
I’ve talked this last week or two with a variety of people in the blogging space, and I’m yet to find anyone with a good news story. The rate of the drop in ads for January varies widely by supplier, so while some are still only showing a small drop (with companies that have manged to maintain most of the business) others are telling me of huge drops well past 40%.
This of course doesn’t excuse our ad provider, who cited the recession in their justification; the conclusion is that some are doing better than others.
Although obviously I don’t have the full picture, the sample is big enough for me to draw some conclusions, and they aren’t pretty. Advertising in blogging and 2.0 services/ apps is on the downward march, and companies that rely on advertising that were marginally profitable, or running at a loss are about to find life that much harder.
Outside of direct deals, I’ve also heard from some publishers that passback inventory rates are declining. Adsense has been mentioned, but that’s not my experience so far. We had a spike up to the US Election which delivered some of the best rates I’ve ever seen in Adsense, and it has dropped back since. Having explored a couple of ad suppliers for that inventory, I would note that some rates are very low at the moment, but I don’t have the history to know if there was a drop.
If you’re interested in selling ads for The Inquisitr, particularly our passback inventory (which is 90%+), drop me an email duncan at nichenet.com.au
To everyone else out there in blogging and 2.0 land, you’re not alone, and god speed.
Jan 14, 2009
It's the worst I've ever seen it for my site. Might as well not be running the ads at all, pretty much.
Jan 14, 2009
Duncan, as painful as it is to see you and others go through this, I can't say it's much of a surprise. Consumers don't want to see the ads. And the ads you're seeing on your site, as you can guess, are pretty useless, both for your brand and for the content. Right now, I am seeing ads for Holiday Inn Express, InsWeb, Fisher Investments, WWII Commando (a video game) and AdSense.
Google's AdSense tries hard to pick up on context. For example, your post on “Did The Mormon Church Go Too Far With Prop 8?” leads to an ad which reads: “2008: God's Final Witness / God's protection from America has been removed, her fall is nearing. / http://www.the-end.com“
So… is it expected your readers should click these? Assuming they aren't, then they aren't giving much value to the advertiser, who should stop advertising. And it's not really for “branding”. I'm not any more likely to stop at a Holiday Inn Express…
It's hard to try and tell bloggers and content providers that their content is assumed to not have value, or they shouldn't be paid, but it's very hard to compete with free, and it looks like ads won't bail folks out for much longer. Hold on to whatever you need to hold on to!
Jan 15, 2009
I think it's really hard to monetize without a very specific focus that allows for other types of monetization that many bloggers don't want to deal with. My mortgage blog makes most of its money from affiliate programs. They're well marked and fully disclosed, but because of the niche my blog is in they work well. Sites like yours Duncan make that strategy very difficult.
I wish you luck because I really like the blog, but we're all going to have to look for other ways to monetize to keep it going in this downturn. I don't have the answer but I hope that you and others figure it out, for all of us.
Jan 15, 2009
well, i think it's time to focus on your writing activities
Jan 15, 2009
if you don't have a vertical and you're a mosh then you've got no hope, pick mainstream and often women's interest categories that are brand friendly and you'll find that they are holding up pretty well
verticals like healthcare, food, babies, family are doing really well because they are necessity based – ad rates there are holding
Feb 7, 2009
I am sure recession would not last longer now, things will be alright soon!