Selling the Homepage

The internet advertising market looks like a golf club in every analyst presentation. If we compare the regular cost per 1,000 impressions on the net to TV we will find out the real amazing thing: TV is cheaper than internet CPM advertising. On top of that, if advertisers want to buy the homepage of the largest portals they would have to pay even higher prices (hundreds of thousands of dollars a week in large portals like Yahoo, MSN etc…)

Google, in comparison, offers a pay per click model, which although it might not be cheaper, guarantees you return the investment of your dollars (assuming you know to calculate it…) Smaller sites offer the advertiser a full ROI based model known as ‘pay per acquisition’ - the advertiser pays only if he gets a client.

The real question is what will be the future model of the main advertising medium, the TV, by the end of the decade. Will it be closer to Google, or will the advertisers continue to pay extra for the best spaces – whether it’s the Super Bowl or it’s Yahoo’s homepage?

Today’s internet experience is not quite exciting – text, graphics and video are in their early stages. Basically, it’s not much more than an electronic catalog. In order for the internet to become a major player in the advertising market, and to take up more than 20 percent of the pie, the experience should be much more exciting. Until that happens, only very few players will be able to charge premium from their audience. The majority of the sites will stay with an ROI based model – meaning no premium for their brand.

K.