Is Facebook harming online media/blog advertising?


Interesting stuff from Paid Content… on how social networks (well Facebook with a bit of MySpace) have pulled down the CPMs (amount advertisers pay per 1000 views) to new record low levels.

At the same time the blog points out that ad spend has dropped in the first part of this year and media is already experiencing a double dip recession.

For me this underlines a few things

1 Social media is seriously harming online media. If social media didn’t exist then online media would command much higher CPMs.

2 That you can’t put the genie back in the bottle – Media companies have just got to work with this and accept that Facebook et al will keep CPMs down over the next few years.

3 However there may be an upside one day – If brands begin to start valuing online media once again. I don’t really think this will happen until we see new a new media properly emerge with many print titles dying or shifting completely online and brands recognising that the new wave of blogs and websites that have grown in the last few years have influential and important audiences.

Still as David puts it on PC

But there’s still hope for web publishers looking to blunt Facebook’s impact on CPMs. The social net doesn’t want to challenge major publishers directly on premium display and has in fact avoided deploying any of the larger display ads that have captured sites’ attention since the Interactive Advertising Bureau and the Online Publishers Association began promoting new standard formats last year. Publishers insist that offering a larger, uniform display format for advertisers will inspire greater creativity.

The thinking goes that in turn, more creativity will spur greater ad spend. That may actually be happening right now. But overall, it will have a limited affect against the never-ending flow of inventory from social nets and the laws of supply and demand that sites like Facebook will continue to exert on advertisers’ finite ad budgets.

Finally I should add that and did a record breaking one million page impressions over the weekend. If the ad sales CPM was $3 that would be $3000 (or rather $9000 as there are three ad positions). The reality is that the real figure will be an awful lot less than that


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