Monday, March 23, 2009

An (online) Advertising Potential Value

How much is the page worth where your online content has appeared?

Interesting idea?

Most of us have seen advertisement in online newspapers. They now form a significant part of publishing revenues.

In exploring the price of online newspaper advertising, it is no great leap of logic to try to attempt to satisfy the question of the difference between price and value.

This is quite an open and transparent market. The rates are published and in a form that equates exposure and price. This suggests that the market is not just active but transparent as well. The Guardian article yesterday puts this space into perspective even if it is gloomy about the prospects for the publishing industry.

Value and price, measured using the exchange rate of monetary currency, would seem to be a reasonable measure for online newspaper advertising.

But it is not a good currency for editorial and social content. There do not seem to be transparent markets or effective exchange rates that convert online conversations into a currency that can be used in most modern commercial environments.

In this research project, I have taken the price of online newspaper advertising and by using the published rates, numbers of visitors from ABCe and have worked through an Alexa comparison of user visits. This has given me an algorithm to provide a figure that would project the value of an advertisement on web pages that are not online newspapers.

In other words if you were going to advertise on that page, how much would it cost you?

If you like, an Advertising Potential Value!

In testing, I have played the results back into online newspapers and the results are pretty good. The formula got within 5% for the Telegraph and Guardian and within 10% of the price charged by Mirror Group.

I know that context is different and I know that web pages are optimised for purpose and thus not all web pages would be suitable to carry advertisements (and many blog pages and other content is not suitable either). I am also aware of the issues we have as between different web sites indexed by Alexa. This is not going to be a micron accurate measure but is will be, at worse, indicative.

However, this allows me to test an approximation of advertising value potential for web pages were they in competition with newspapers for advertising revenues.

NOTE: the return you get will be the value based on the UK audience figures only. The global equivalent will be bigger and based on a different base point.

Over the next few days, I will build a widget so that you too can have a look at the results and will post it here.