Online Ad Rates Are Going Through the Roof - But Which Ones?

The costs advertisers are paying for web advertising have been rising significantly. According to Joanne Bradford, MSN’s corporate vice president and chief media officer, pricing pressure over the last two years has led ad pricing on the front pages of some popular MSN sections to rise tenfold. But with no accurate measurements for across-the-board ad pricing trends online, it is unclear how deep-seated the rise in ad prices actually is. According to Jordan Bitterman, vice president and media director for Digitas, an online marketing agency, many sites have 20-30% ad inventory left unsold meaning price increases are counter-intuitive for filling their ad space capacity. The idea that not all online ad prices are going through the roof has been confirmed by Matt Coffin, chief executive of LowerMyBills.com, who has said that in his experience (his company advertises extensively online), publisher pages that attract a general readership - as opposed to readers of a specific demographic - have actually dropped their rates.

• Sources: New York Times
• Related commentary: British Online Ad Spending Outpacing U.S. By Nearly 2 to 1, Online Ads Steal the Show From Traditional Media, U.S. Online Ad Revenue Sets New Record; Yahoo's Semel Feels Ad Growth Underestimated, Online Advertising Tops $4 Billion Per Quarter
• Potentially impacted stocks and ETFs: Google (GOOG), YAHOO (YHOO), Microsoft (MSFT), IAC/InterActiveCorp (IACI). ETFs: First Tr DJ Internet Index Fd (FDN)

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