Stephen Foley: There's hope yet that web ads will start to click again
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Saturday 28 April 2012
US Outlook Internet advertising is not a bust after all. A creeping despair about the effectiveness of pay-per-click online ads has been infecting both the ad industry and those of us on the publishing side who rather hoped that online advertising would be lucrative enough pay our wages one day.
Click-through rates, the number of times a web surfer clicks on an ad, are abysmal. Advertisers are paying less for each click, too, a fact that has freaked out Google's shareholders whose fortunes rest on online ad revenues.
The reason can be found in a study by Pretarget and comScore, two research firms, out this week. It concluded that having a person clicking on your ad bares basically no relation to whether they will actually buy your wares in the end. The best measure of that, it turns out, is whether a web surfer lingers to look at your ad or hovers over it.
That means advertisers should invest in making sure their ads appear on web pages in prominent positions, and publishers might be able to charge the premium rates that have failed to materialise under the pay-per-click model.
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