Gap Between Advertisers & Audience Growing

Mar 17th, 2008 | By | Category: Internet TV, Making Money with Podcasts

We’ve noted before that bad advertising is holding back the development of Internet television.

Advertisers aren’t sure where to advertise on the Internet, how to advertise in new media or how to measure their success, and they’re spending their money on old media as a result, even though they know traditional advertising is becoming less effective.

Incredibly, for every $1 advertisers spend on ads in Internet video, they spend $100 on TV ads.

This is despite the facts that:

If It Keeps On Rainin’, The Levee’s Going To Break

Advertisers know that they need to move their money into new media, but they are clueless about how to do it:

Spending on online video ads represents less than 4 percent of all Internet advertising and just 1 percent of the amount spent on TV, according to eMarketer. But growth is expected — with the research firm forecasting U.S. spending more than tripling to $4.3 billion in 2011 — especially as more viewers embrace full-length TV episodes and other video online.

The challenge is finding the right formula — in the creative approach, the format or the frequency with which the ads appear — so visitors notice the pitches without getting so annoyed that they never come back.

“Users love free content and advertisers love to fill up every minute and pixel with the messaging, and publishers do have to find that balance,” said Geoffrey Coco, an advertising executive with Microsoft, which has a video news partnership with The Associated Press. “There’s been a lot of innovation but I don’t think we’ve settled down yet.”

There’s going to be a flood of money coming into new media very soon, but nobody’s sure what path it will follow.

Where do you think it’s going to go?

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  2. Rian says:


  3. Jimmy says:

    I think it depends on what the podcasters do. You can spend $3.00 CPM and reach the same audiences via banner ad networks. Audio and Video ads are more compelling, and should merit higher CPM, but some of the podcasters think they should be getting $40.00 CPM. That isn’t going to last long, if at all. If you can reach the same audience on a web banner network for a fraction of the price, advertisers will go there. Whether it is effective or not, they care more about cost. The key here is to sell the reason for advertising in podcasts. What do you get by advertising in a podcast that you don’t get from advertising on websites that cater to the same audience? Think about that. Argue it for and against. And how much more is that worth? Now prove it to the advertiser in a business case. Hard core proof. Only then will ad money come into podcasting IMO.

  4. James Lewin says:


    Good points. Podcasters are capturing peoples attention, which is extremely valuable.

    The trick is going to be getting advertisers to value the podcast audience and to figure out ways of sponsoring the content people want to see rather than competing for people’s attention.

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