Several large internet-based media companies have said third-quarter advertising sales are soft. There is also the problem of Facebook, which now controls a quarter of all the online display inventory in the U.S. Industry analysts believe that Facebook sells this inventory at low prices, both because it has too much to command premium rates for all of it, and because it damages the ability of its competition to keep rates high.
One of the best ways to tell whether internet advertising has become weak is to look at the quality of clients buying the premium and most desirable display spots at the largest websites. More of that inventory is taken up by low-paying advertisers than the websites would like. Messages from free credit report sites are increasingly common. There are also more ads for incredibly low-priced mortgages.
When the inexpensive ads come out in force, it means a quarter or more of hard times for online sales revenue.
Douglas A. McIntyre
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