This article, published in BusinessWeek last week, predicts a big drop in the prices that major online publishers can charge for banner ads. Part of the disruptive force that is putting pressure on prices is a company called Quantcast, which uses cookies, mathematical models, and billions of direct observations each day to determine the demographic characteristics of the people that visit the millions of websites that it tracks (all of the data is anonymous). The article's theory is that if advertisers have access to this data, they will no longer need to place banners ads on marquee sites to reach their target customers.
The article also contends that publishers could use information like the data collected by Quantcast to sell ads for untapped reader segments. However, I doubt that these additional revenues would offset the revenue lost by big publishers due to the banner ad price reductions. It looks like more trouble for the big-name publishers...
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My friend is the founder of Quantcast. I'll ask him for his reactions to the BW article and post them here.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteHere was his reaction:
ReplyDelete"(1) we really don't want to commoditize inventory. In fact, if I were to guess, I'd say that we're really going to help publishers sell a lot more inventory at premium prices (or, at worst, just-subpremium prices), not at remnant prices. In that sense, a publisher who read the article _could_ get a mistaken impression about us. But I'm not worried about it.
(2) Comscore doesnt have a chance in heck of doing any of this.
Overall though, generally, it is nice to have positive coverage, so I'm not complaining too much."