ClickZ: Why Is Search So Hot?

Dave Morgan writes that search has become a mania in the online ad business not so much because of the inherent greatness of the media itself, but because of the flexible, easy and predictable manner in which it is sold. Unlike banner ads and other forms of online advertising, search uses lead-based transactions, simple text ads, self-service buying systems and transparent, bid-based pricing.

This is another way of saying that the other online media is priced too high. While search inventory was "floated" a couple years ago via online bidding markets, most other online media remains glued to rate cards that are based more on publisher hopes and wants to take advantage of the most desirous of buyers. Where generalized (as opposed to niche target) banner media pricing has been freed into a market system, the prices sink to sub-dollar CPMs.

The Internet media business finds itself with a search community desiring to increase its inventory so that it can sell more to growing demand, while other media outlets are more worried about selling the media they already have with generally a lower value proposition and a slower growing demand.