According to a recent report by Jupiter Media Metrix, online advertising prices will continue to fall for six months to come keeping media buyers in their strong buying position.
Over the past year, prices have already fallen by 30%. In June 2000, advertisers were paying an average of e30 for 1000 page impressions, currenly they are paying about e20. Increased competition has been blamed for the continuing fall in prices as the space available for online advertising largely exceeds the demand.
Jupiter estimate that the surplus of unsold ad space is worth somewhere between 60 and 70 million euros per month, whilst another report from Jupiter reported that 25% of traditional advertisers found online too expensive a medium.
“Lower prices donÂÂ’t necessarily mean less ad spending”, says Staffan Engdegard, online advertising analyst for Jupiter MMXI. “Advertisers get more for their money, but, more importantly their dominant position in this buyerÂÂ’s market allows them to change the pricing dynamics: They increasingly expect price deals based on performance, where they pay for the business results be they clicks, leads, members or purchases, when traditionally they paid for the number of impressions”.
