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Niche sites offer better value to advertisers says new report from Contextweb

Advertisers and media agencies are obsessed with so-called ‘short-tail’ internet sites, the big ones like Facebook, to the detriment of smaller sites which actually offer more rewarding audiences.

This is the conclusion of a new study and white paper from Contextweb Inc., a provider of integrated digital media services It reports that advertisers are missing a vast, largely untapped opportunity for digital media performance by focusing on the relatively small number of hugely popular short-tail Internet sites to the exclusion of the long tail – the millions of smaller sites with niche audiences of enthusiasts.

The study, based on an analysis of digital media performance across more than 18,000 publisher sites and 1,000 campaigns from Q3 to Q4 2010, concludes that long-tail advertising represents a simple, cost-effective way to gain online reach, increase click-through rates and ultimately boost sales at a significant discount to top web destinations featuring premium content.

Overall, Contextweb found the average click-through rate for long-tail advertising during the period was 24 per cent higher than for short-tail advertising. All 20 advertiser verticals in the study experienced click-through rate gains, with the top category seeing a 50 per cent increase.

Yet according to the Contextweb study, digital marketers continue to overspend on the more costly short-tail without getting a significant boost in click-through rates to justify the outlay. A couple of telling statistics from comScore are cited in the report: while 70 per cent of reportable display spending goes to short-tail websites , internet users age 18 and over spend just 14 per cent of their time online there.

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“While long-tail advertising is often overlooked by digital marketers in favor of premium sites with massive traffic, this can prove to be a costly mistake,” says Rose Ann Haran, chief marketing officer of contextweb.

“The comScore statistic cited above demonstrates a serious disconnect between where the majority of consumers are online and where marketers are placing their large digital bets. By contrast, the long tail provides significant value to advertisers, allowing them to realize discounted CPM rates without sacrificing their ability to reach those most likely to buy their products and services.”

Some other key findings detailed in the paper:
• All advertiser verticals saw increased click-through rates in the long tail as compared to the short tail. Advertisers in the alcohol segment saw the greatest lift, at 50 per cent. The lowest long-tail lift was 12 per cent for auto advertisers.
• 76 per cent of all content categories saw increased click-through rates on long-tail sites, with the top three categories seeing a lift of 50 per cent or better.
• While 24 per cent of content categories experienced a lift in click-through rates in the short tail, ranging from five per cent to 35 per cent, these gains are often offset by the price premium paid.
• Long-tail advertising provided significant unduplicated reach compared to the short tail. In other words, advertisers can reach the same type of audience with the same demographics as that of the short tail, at a lower cost.

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Contextweb found select unduplicated reach to be at least 78 per cent on the long tail across 18 content categories, with education the highest category at 98 per cent.

So it’s down to our old friends the media agencies then, But, as usual, it looks as though they only have the time or inclination to fully assess and use the larger media owners.

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