Prices are falling for online ad space

The New York Times reported on 16 October that the price of ad space online is down 27% this year.

Web sites about technology were the only category that didn’t see ad prices fall in the last twelve months.

Prices for ad space online vary widely. On social networking sites, rates are usually very low. On smaller niche sites, much higher rates can be achieved.

Ads on small web sites – those that get fewer than 1 million page views per month – sell for about three times as much as space on big sites with more than 100 million page views per month.

The price difference relates to the fact that small sites have niche content, which means that advertisers can reach a more targeted audience. For example, a teenager in the United States and an elderly person in India can both use Facebook. Advertisers don’t know who is seeing their ad. By contrast, a small site dedicated to restaurant reviews in inner Melbourne would have a more defined set of readers.

Of course, the question of readership remains: do people look at display ads on the net?

If I was thinking of investing in display advertising online, I would certainly do a small test first. (OK, I know, regular readers will have guessed that’s what I would say!)

Why set yourself up for a possible loss? Do a small test and the worst case scenario is that you’ll lose a small amount. But you’ll also gain specific information relating to your product or business that could be invaluable.