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Good News: Some are Planning for a Recession (Or, Now I Can Finally Put My Economics Degree to Use)
You know that we're in the business of selling
advertising here at ArcaMax. What you might not know is that we buy
LOTS of advertising ourselves.
Our media buying department has one clearly defined mission: drive
traffic to our subscription lists and websites. This increases the
number of people who will see the advertising sold by our sales
department and this directly impacts our revenue. More readers means
more ad impressions which translates into more revenue.
I don't think I've divulged any trade secrets yet -- this is the model
any company generating advertising revenue online follows. And the
price of ad inventory is driven by the forces of supply and demand,
whether we're buying or selling.
Now here's the "good news": many experts are predicting economic
trouble ahead for a variety of reasons (gas prices, housing credit
crisis, etc.) As a result, the natural reaction for many in business
is to tighten their belts and stop spending money, which is behavior
that helps create exactly the situation everyone is hoping to avoid, a
recession.
Now, what does all of this economic theory have to do with online
advertising? In my opinion, it sets the stage for a great buying
opportunity for companies like ours who buy media.
Here at ArcaMax Publishing, we have a frequently-repeated saying that
"Advertisers advertise… that’s what makes them advertisers." If
companies in competition with our buying department cut back fearing a
recession, that only helps us. We should be able to get more
inventory and hopefully at better rates. As we noted above, this in
turn grows our inventory and gives us the opportunity to make more
money.
Naturally I'm not hoping for a recession, but rest assured that we'll
be in the market grabbing as much market share as we can if things do
slow down economically.
I encourage your company to approach your media buying budget in the
same way, whether you're buying our ad space or buying elsewhere.
Maybe your direct competitors will slow down and play "safe" –
rejoice! Take this opportunity to increase your market share. Please
let us know if we can help.
This news arrived on: 06/24/2008
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