Posted 04.15.11 | Filed under: Advertising & Marketing, Business Strategy, Editorial & Programming, Technical Architecture
New Gawker Model is Junk-Mail
The problem with Gawker Media’s current model—and this is true of many other sites, too, including the Huffington Post—is that it’s based on pageviews and those tyrannical CPMs. It’s essentially a junk-mail direct marketing model, which Batty is very comfortable with: watch him talk about how Gawker Media has “massively scaled our ability to deliver consumer activations,” whatever that means.
But the amount of inventory online has been growing much more quickly than advertisers’ demand for that inventory. As a result, CPMs have been falling for years, and Denton says that since 2008 he has been getting only half the revenue per page that he used to get in 2004. What’s more, it’s getting harder for Gawker’s ad-sales staff to charge a premium over what Gawker could get simply by signing up for an ad network: the difference between the two rates—and, by implication, the amount of value that Batty’s dedicated ad-sales team can add—has been shrinking too.
via Felix Salmon, The new Gawker Media | Analysis & Opinion | Reuters.
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