Corey Katir: Internet Advertising, Online Advertising, eMarketing Analysis

 

 

Internet Advertising Analysis Part 2; Power Ratios

 

The Internet Advertising Potential Is Measured by its Power Ratio. It is our belief that the Internet’s power ratio of 1.1 is well below the 3.0 it could be. Simple recognition of Internet user demographics should push the power ratio higher this should mean better pricing and higher inventory sellout ratios on the Internet. The benefits of targeting could push the power ratio to the 3.0+ level, somewhere ahead of magazine advertising. As the Internet’s power ratio rises, we believe that those areas with currently high power ratios, high pricing and low targeting capabilities such as newspapers may be hurt. We believe that exploiting the Internet’s superior targeting capability and eventual mass market reach will push the current power ratios and pricing higher. In traditional media, the “power ratio” is simply the percent of total advertising presented through a given medium divided by the percent of time the audience spends on that medium.

 

 

 

Figure 1 Media Comparison of Advertising Share and Time Share

 

 

As the figure above shows, some of the major media have an unequal distribution of usage and advertising. Newspaper and magazines, which have very high advertising shares as compared to time shares and consequently high power ratios are vulnerable to price erosion. Television and radio appear to have a greater time share than advertising share and, thus, lower power ratios and may experience increased prices in the future.

Higher power ratios are justified by better targeting and better demographics. Lower power ratios may represent poor demographics and/or poor targeting. However, overly inflated power ratios are vulnerable to price erosion and overly low power ratios may indicate excess pricing power.

 

 

Figure 2 Comparative Power Ratios (1999)

 

Advertisers are already recompetitionding the Internet for its targeting and demographics, but not to the extent that we feel it deserves. Unfortunately, power ratio calculations fluctuate due to a wide range of usage estimates. Between Media Metrix, Nielsen//NetRatings, and other Internet usage monitors, one could arrive at varying levels for the power ratio of the Internet. Sites’ internal usage logs would give another set of data from which to calculate a power ratio.

 

 

Table 1 Power Ratios of Major U.S. Media

 

 

Continue with:

Part 3; new Media vs. old Media , Part 4; Media and Internet Use , Part 5; Impression Measurement, Internet Advertising Metrics,

Part 6 ; Calculating CPM and CPM Pricing , Part 7; Effective CPM is currently the only statistic on which comparisons can realistically be based ,

Part 8; New Vs. Old Media: A Big Market from Which to Gain Share , Part 9; Internet Advertising; Right type of Medium and Targeting ,

Part 10; Broadband brings Rich Media , Part 11, Rich Media Studies , Part 12; What Could K.O. Internet Advertising? , Part 13; Email ,

Part 14; Advertising or Direct Marketing? , Part 15; What Does the Internet Advertising Market Consist of? , Part 16; Rich Media still has some drawbacks ,

Part 17 Inventory and Concentration , Part 18; Market Share and Concentration Data , Part 19; Global Impact, Part 20; Residential and Business Use ,

Part 21; Pageviews , Part 22; Advertising vs. Direct Marketing , Part 23; Investment Conclusion

 

Corey Katir Brings you Lady Gaga News ; Corey Katir Brings you Eminem News ; Corey Katir Brings you Justin Bieber News
Corey Katir Brings you Michael Jackson News ; Corey Katir Brings you Lil Wayne News ; Corey Katir Brings you Miley Cyrus News
Corey Katir Brings you Katy Perry News ; Corey Katir Brings you Shakira News ; Corey Katir Brings you Rihanna News
Corey Katir Brings you Drake News ; Corey Katir Brings you Christina Aguilera News

	© 2002-2004  Corey Katir Internet Advertising, Online Advertising, Internet Marketing, Branding, eMarketing Services		Optimized by classicbranding.com