If there’s one positive thing about the slow economy, it’s the availability of better deals for media buyers, from record-low CPMs to innovative packages being offered by sellers eager for new revenue. Although rates for traditional media haven’t seen drastic price-cutting, there are significant discounts available for Internet advertising.
Mark Stephens, director of media services at Lot21 Interactive Advertising Group Inc., San Francisco, said he recently negotiated a Web CPM rate of 25 cents. He declined to name the seller.
"That is nuts," Stephens said. "It’s costing them more to serve it." In other deals, he’s been able to negotiate ad rates on general sites achieving CPMs between $2 and $5. Generally, most sites are willing to negotiate roughly 20% below the rate card, he said.
In June, Jupiter Media Metrix Inc. reported the average CPM for standard banners was $30. Stephens said he’s also been negotiating more cost-per-acquisition deals, which many publishers avoided last year. CPA rates are based on the advertiser’s total costs, including creative, media, ad serving and agency fees vs. the number of acquisitions brought in. CPA deals can range from $20 for low-margin goods to $130 for high-end products. "Everyone is being flexible," Stephens said.
Internet ad buyers say excess inventory is making newer ad formats, such as larger rich-media ads, more attractive. Buyers are willing to pay more for ads that deliver a good ROI.
"There’s been a real push to get more creative online and step away from run-of-network banner buys," said Maggie Boyer, VP-media at Avenue A, Seattle. "It has been really healthy for online advertising."
Boyer said she’s been doing a lot more rich-media buys because the ad formats are delivering a higher response for advertisers.
Offline media buyers said print publishers and broadcasters have not been doing much rate cutting, but they’ve been willing to put together more value-added packages for advertisers.
Sheree Johnson, senior VP-director of media services at NKH&W, Kansas City, Mo., said she’s been able to get special deals from print publishers, such as no extra charge for color or premium placement.
Johnson said she would like to see even more value built into packages next year. "I’d like to see them think outside the box," she said, referring in particular to trade magazines, in which she buys a lot of ad space for her b-to-b clients.
"Instead of putting advertorials together, put seminars together to extend their brands," she suggested.