eDiets (ticker: DIET) CEO David Humble gave one of the clearest descriptions to date of the inflation in online ad prices on his company's Q2 conference call. Excerpts:
…I would say that the online advertising environment we are operating in is still very challenging. Some key advertising spots are up 75% over last year and no longer affordable.
On the plus side, our years of experience buying online media has paid off. Our media buying team found opportunities moving between… online and television to keep our acquisition costs in line.
Since inception, online advertising has been a highly cyclical business. Right now there is a lot of new money in the market and it is clearly a sellers' market. Now with Google building their advertising model and bringing new inventory online, things could improve for us at some point. Regardless, we think we can thrive in the current market.
…In advance of the new year we hired a new ad agency. This group has a great deal of success with television direct response branded campaigns. Many people have never heard the eDiets name, but given the cryptic messaging dictated by online banners, knowledge of the benefits of our products and services is limited.
Over the next year we will concentrate on communicating eDiets message more clearly in television and print. Looking out we see other opportunities.
(Quotes are from the CCBN StreetEvents transcript.)
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