House Ads Still Taking Up Space Online

Although the number of advertisers on the Web has grown approximately 62 percent since January of 2000, a sizable portion of online companies are still filling ad space with banner ads promoting their own products and services, according to research conducted by AdRelevance.

According to the research, advertising by publishers on their own sites accounts for almost 20 percent of all available online advertising inventory. AdRelevance looked at house advertising on the 500 highest traffic trafficked ad-supported sites between January and April 2000. Among the findings:

• 179 online companies devoted more than 1 percent of their inventory to house advertising
• House advertising accounted for more than 17 billion online ad impressions out of a total of 92 billion impressions
• Few companies are extensive users of house advertising: 63 sites carry more than 20 percent house ads and only 15 sites in genres such as kids and family, games, and movies and television, run greater than 50 percent house ads
• Compared to other Web site genres, vertical sites such as online employment companies, lead the pack when it comes to running house ads. Approximately 45 percent of all online ad inventory on employment sites is devoted to house advertisements, while portals run an average of 12 percent house ads.

“Although the online advertising industry has been growing at a phenomenal rate, the AdRelevance house advertising figures suggest that almost 26 million dollars of potential online ad space is going unsold every week,” said Charlie Buchwalter, VP of Media Research for AdRelevance. “It’s important to note, however, that this house advertising phenomenon is not equally spread across all sites. Portals, community sites, and search engines are able to sell a higher percentage of their inventory than a variety of smaller, more vertical Web site genres.”

“Sites with large number of house impressions appear to be taking full advantage of the marketing and communication opportunities that house advertising brings,” Buchwalter said. “As some of the most highly visible sites on the Web today, with an average of over 20 million visitors in April alone, portals are able to reach an extremely broad audience across their affiliated Web sites, minimizing the need to advertise on competitors’ sites.”

As the number of advertisers on the Web increases, the amount of house advertising is bound to decrease, according to AdRelevance. For media buyers, knowing the amount of house advertising on a site can be an effective negotiating tool by helping them to assess the demand for ad space on a Web site. Sites with a large amount of house advertising are more likely to be flexible with pricing than are those sites with a majority of inventory devoted to paid-for banners.