The collapse in Web advertising spending is the result of an imbalance of supply and demand: too many Internet sites chasing too few ad dollars, said a new study.
“Web Ad Autopsy,” is a Part One of a two-part report by the Content Intelligence Group of Lyra Research, Newtonville, MA that found an approximate 70% plunge in advertising CPMs has “fundamentally undermined the business models of many Web publishers,” said a statement.
Other factors that contributed to the collapse include:
* Publishers that sold overpriced ad space until the dot-com venture capital dried up;
* Media sales pitches based on “click-through rates” until those rates plummeted;
* Advertisers that failed to understand differences between direct-response and brand advertising;
* Advertising agencies that failed to integrate Web and traditional ad campaigns;
* Publishers that did not prove that Web advertising actually works;
* Traditional advertising agencies that diverted ad dollars away from the Web to boost their agency fees.
