Web advertising not as hot as it seems

Some popular web sites have failed to attract national advertisers, so they’re filling their sites with house ads, a new study shows.

Some of the internet’s hottest sites are trying to weather skepticism about online advertising by running lots of ads – for themselves.

Having failed to attract national advertisers in the numbers they’d expected, many web sites now are filling their pages with house ads.

Advertising was supposed to be the financial backbone of many a web venture. Sites that have been giving away information and services and selling products at deep discounts thought they could make up the difference by selling space to advertisers eager to reach web surfers. Now, however, that theory is in doubt, as a number of well-regarded sites struggle to attract spending from national brands.

Downfall of the banner ad?

Advertisers, says Ann Carey, director of interactive services at New York agency Margeotes Fertitta & Partners, are wary of the web because they are beginning to doubt whether the rectangular “banner ads” that dominate most web sites have any effect on consumers.

So-called “click-through” rates are decreasing. Six months ago, she says, about 1 percent of consumers who viewed an ad clicked on it, compared to less than a half of a percent these days. “We’re seeing the downfall of the banner ad,” she says.

Advertisers these days are being more selective about where they will buy space, Ms. Carey says, “now that the novelty has worn off.”

Web sites toot their own horns, in many cases, because they “aren’t willing to lower the cost of inventory to fill (it) with paying clients.” In that way, the house ads are one signal that a site is losing out on revenue.