Fissure in Online Ad Revenues

According to industry experts, the radically divergent click-through rates sites between brand name sites and their small counterparts is driving a rift in the online advertising marketplace. While advertising ratecards of top-end, high-traffic sites continue to increase or level off, the industry average attainable CPM rate for banner ad impressions continues to decline for most. Due in part to the growing number of sites offering advertising and the increased pressure from advertisers to lower prices, many sites are effectively being forced to undersell themselves. According to the Internet Advertising Bureau, this trend is completely denying advertising dollars to many websites. Despite the fact that most advertisers and industry analysts continue to measure online advertising success by the number of people who click through to their site from a banner ad, Jupiter Communications estimates that online advertising will balloon by 60 percent in 1999, generating in excess of US $3 billion.

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