Is There An Online Ad Bubble?

from the or-is-it-cyclical? dept

Back in the mid-90s, during the original internet bubble, just about every consumer business plan (that wasn’t about e-commerce) was about online advertising. Everyone was focused on getting eyeballs and making their sites “sticky” for advertisers. However, the bottom fell out of that market when the bubble popped — and people realized that online ads weren’t that effective. So, now that everyone’s focused on online ads, some are beginning to wonder if this is a bubble that will pop as well. There certainly are a few differences this time around. First off, more (and bigger) advertisers are willing (and eager) to jump online — especially as other advertising, such as television, is having problems. Second (and perhaps more importantly) the technology for targeting ads has gotten much, much better, thanks in large part to the paid search world. However, those who are relying solely on internet advertising for revenue would be silly to assume that the cyclical nature of the advertising world won’t come back to bite at some point again. The media business is a very tough business, and just because the internet is the hot spot for advertising these days, it doesn’t mean that will last.

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