Wednesday, March 07, 2007

Expensive Real Estate

I recently renewed my membership with a great online community of LDS business owners which, hopefully, will help me with the promotion of LittleLDS. I’m excited about it. The site is www.BuildingTheKingdom.com and they have generated quite a bit of traffic this year. They’ve revamped their site, and have expanded their staffing, marketing and focus. I’ve actually been a member for a while, but only recently started using this virtual venue as a place to advertise. That’s actually what I’m targeting with this blog today; the price of banner advertising.

The web is literally made up of many millions of sites all interconnected and making money on each other through “per-click” technology. This means that they link to each other with banners and profit not only through the business they are advertising on the websites themselves, but also (and at times, more importantly) just by the traffic that runs to and through their websites. It’s a fascinating world, the internet.


It works because the nerds who used to get made fun of in school have now taken over the world by turning us all into computer-dependent cyber junkies. It’s pay-back time. Just look at us “bloggers.” We’re a whole sub-culture of ordinary people who act like we’re all columnists for some New York newspaper. Some of us just write for fun, or to stay connected to friends and family, while others have made an actual career of it…either way we all do it to get readers. Then there are the “pic” sharers. The internet is bursting at the seams with photos and other images. Some of us don’t stop with online photo albums, but advance to online scrapbooking, and full-scale website portfolios. Regardless, we’re making the world smaller with the ubiquitous internet (hasn’t its clout earned it the respect of being capitalized by now?).

At the heart of this mass-transit medium, there is another thing that I find fascinating. Advertising. In order to catch the eye of the cash-wielding consumer, nerds have employed artists to create “banners”. Aptly named, these are virtual billboards that wave at us (sometime literally…i.e., animated “GIF” banners) from the corners and margins of the sites that we visit. Ironically, many of the banners that have been specifically designed to attract our attention have caused us to conversely “evolve” into ad-ignoring internet browsers. This evolution has, of course, spawned the annoying, breed of advertising known as “pop-ups”. To by-pass our keenly developed tendency to ignore the lure of the sales pitch, “pop-ups” were invented to interrupt us in the middle of whatever we’re doing, with total disregard, just incase we intended to NOT click on that “suggestive” banner on the website. Exit, the polite style of advertising… Enter, the “in-your-face,” “See-it-whether-you-want-to-or-not” style of advertising. And with that, out came the inevitable weapons of mass obstruction. Software specially designed to impede the intrusion of “pop-ups.” Suddenly we’ve all become total experts at AVOIDING the very stuff that we, as business owners, are working so hard to put in front of each other. Is this getting complicated, or what? What a paradox.

Well, not to be left out, I’m putting in my two cents. I want a piece of to chaos. While learning about the dos and donts of web-based advertising, I’ve noticed something about this virtual world that seems down-right counter intuitive to me. Stay with me, this is going to get a little technical…

In the real and tangible world, we’ll say, Las Vegas (a relatively hot topic-of-a-town), physical real estate is pretty expensive. Of course, it varies from day to day, and even throughout different locations in the city, but generally speaking, it’s still costly. As I write this, the average cost for a piece of residential real estate, will run you about $372,046. Let’s just assume for simplicity sake that this amount will afford you an average sized 3-bedroom, 2-bathroom, 2,000 sq. ft. house. If you do the math (I’ll do it for you), that equates to about $186 per square foot of physical real estate. Now keep in mind that this number is for a tangible thing….an intrinsically-valued commodity.

Okay, now wrap your brain around this….

The space that I’ll be populating with my homemade LittleLDS banner on the Building the Kingdom website is only 150 pixels wide and 100 pixels high. For those of you who are NOT nerds or artists, like me, I’ll put it into lay man’s terms. 150x100 pixels, at 300 dpi (Dots Per Inch), is only 1.625 inches by 1.0625 inches. That’s right…this virtual real estate that I’m RENTING (nope, can’t even BUY it) is barely larger than a POSTAGE STAMP! And we complain about those at only $0.39 (so far)! Now, for me, a renewing member of the community, the banner came free with my membership renewal. However, let’s just play devils advocate here. What if they hadn’t given it to me as a special promotion? Wanna take a guess at how much this tiny piece of virtual real estate costs? Go ahead…guess. $25? No. Not even close. $50? Nope, try again. $100? Keep going … It costs $130 to NOT OWN this intangible space in a virtual world. Even crazier than that, is the fact that my banner will be among many others of the same size which will take turns in a per-click rotation. That means that about every 5th person who logs on to their website will actually see my banner. Nuts, isn’t it? In the real world, that would be like buying a house, but having it disappear after you drive away from it….only to discover that it only reappears every 5th time that you look for it. Wait, it gets better. Let me put it into even greater perspective. Let’s compare apples to apples.

If I take that same 1.625” x 1.0625” of virtual space and convert it to area (length x width), I would get about 1.73 square inches. In order to compare apples to apples, I need to convert that number to square FEET. So, 1.73” divided by 12” (the number of inches in one foot) equals about 0.144 square feet. Still with me? That means that the cost of this piece of virtual real estate, costs $130 for less that 15% of one square foot! That’s roughly $903 per square foot!!! If I built the same 2,000 sq. ft., 3-bed, 2-bath house on land in the virtual real estate world of the internet, it would cost me over $1.8 million dollars!!!! And the rule of “location, location, location” still applies. Depending on the website and its traffic flow, $130 for a banner can actually a good deal where web advertising is concerned! Dang! Isn’t business GREAT??

So, get a good look at it folks… the infamous LittleLDS banner!





(actual size)

1 comment:

Kim said...

Just had to let you know that as I was finishing reading this post, our Devil Child came into the office to insist I come do something with her. I was at the end, so the banner was visible on the screen.

After yelling, "Mommy, get up! Mommy, out office. Mommmyyy!!!" she looked up at the screen, saw the banner and shouted, "Daddy!" I love that she recognizes your stuff.