Monday, November 12, 2007

Publicis: Online Advertising Overvalued

The CEO of mega-marketing group Publicis says the current valuation of Facebook and other social networking applications is crazy, and that online advertising is headed for fall soon.

Maurice Levy says despite the rise in online ads, there's not nearly enough dollars to support the aspirations of social nets. The bubble will burst; it's just a matter of when.

I couldn't be more in agreement. The sad reality for publishers is that the value that can be derived per page of web content -- especially when it is user generated -- will never support the business models that MySpace and Facebook are betting on. Targeted ads and interactive content will help raise the CPMs, but sustaining the current growth is not possible to reach the traffic levels that would be necessary.

Via: Mediapost

Posted By John Gartner at 09:52 AM
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