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.

6 comments:

  1. Interesting piece - and I'll be very interested in the widget. I also blogged on the topic of how to calculate AVE and whether it is still (or ever was) a credible metric http://tinyurl.com/csnybb

    Do you think that online online AVE will be accepted any more than its print compatriot was?

    ReplyDelete
  2. The tool is on its way Lyndon.
    I trust that online AVE's do not become common currency. The whole idea is rubbish. Online, some people go to extra ordinary lengths to avoid advertising. So a measure of AVE's on line might be a measure of abysmal failure!

    I do think there is a case for research into the nature of the potential for measuring values inherent in a page and this is the first step in identifying a market and then some form of exchange rate...
    Lots of work to be done.

    ReplyDelete
  3. One has to evaluate the content of the page, visitor count and ultimately the relevancy of the page content with link connecting it to another page.

    The better the page is designed from a marketing perspective will determine the effectiveness and click through rate that page has.

    The idea that a page has some value is based on what a person is willing to subsidize the page owner for leasing space on that page.

    Online advertising has created a new real estate industry where the value of the property is not determined by the same metrics as physical real estate.

    ReplyDelete
  4. Interesting comment and one to be considered in the next phase of our research.

    ReplyDelete
  5. Its no wonder that marketers are moving online and video is certainly where its @! Video is far more valuable than other adverting mediums because it so targeted...you are able to communicate your offering by speaking directly to your potential customers on demand, and track/measure performance! www.adwido.com

    ReplyDelete
  6. I totally agree with Charlie that online advertising through videos is really a powerful tool. Today the people are using internet for everything and they want to get it at cheapest. And online sales provide it. So, it has really great selling potential.

    ReplyDelete