Online Advertising Rates Are Falling

Online advertising rates are actually going down, a new survey from AdKnowledge shows.

Internet advertising rates in September fell to their lowest since last December, when it started tracking such data, the company said.

AdKnowledge said the dip partly reflects a surplus of online space relative to advertiser demand. In other words, the number of businesses advertising online is growing, but the number of Web sites that are looking for advertisers is growing faster.

The failure of advertising rates to show any substantial rise during a time when Internet use has exploded, could suggest businesses are getting smarter about the value of online advertising, rather than just throwing money at the Internet, Reuters said.

“Rates may have been artificially high to begin with,” said Michele Schott, director of marketing communications at AdKnowledge. “I think everybody is just feeling their way.”

The survey showed Internet advertising rates in September fell to $36.29 CPM or cost per thousand, compared to $37.84 CPM last May, and $37.21 CPM last December.

AdKnowledge officials cautioned against reading too much into the average advertising rates, since they fluctuate widely from site to site. It said certain technology and computer Web sites were commanding CPM rates of more than $75, while other lesser-known sites sold ads at a CPM of less than $1.

Travel-related Web sites showed a sharp increase in ad rates over the past few months. CPM on sports sites was little changed, and shopping sites showed a slight decline.