CAMBRIDGE, Mass. – An MIT Sloan School of Management professor offers a cautionary note to merchants and others who think they can get better results at a lower cost by advertising on the Internet instead of through more traditional media: Be careful what you click for.

According to MIT Sloan Assistant Professor Alessandro Bonatti, the same search and other technology that has certainly enabled advertisers to target particular audiences, such as men between 25 and 35 years old who work on Macintosh computers, is also creating greater on-line competition for the same audience, thus reducing the profitability of advertising on any targeted web site.

“We know that newspapers have a very limited ability to target audiences,” says Bonatti, who worked with Yale University economics professor Dirk Bergemann on his research into the issue. “Specialized magazines can do better, while Google has a very good ability to target who’s browsing each page. So while online advertising certainly has the potential to drive out traditional advertising, it does not necessarily follow that online advertisers will make more money. That depends on the concentration of the online advertising industry.”

Facebook, for example, “is able to sell ads that are crafted specifically for me,” says Bonatti. “So if Facebook was the only online provider, it would make a fortune. But as technology keeps improving, more and more web sites can sell very narrow products to very specialized audiences. And with lots of people targeting the same audience, the profits to be made through specialized advertising become more and more spread out.”

So while online advertising has certainly hammered newspaper and other traditional media, “from a profitability point of view, competition for advertising between two super-targeted online media is worse than competition between the New York Times and the Wall Street Journal,” according to Bonatti. “Instead of competing for one large pool, one big market, you will have price war in each targeted segment as the slice gets more and more narrow.”

“The paradoxical result,” says Bonatti, “is that the better the technology, the lower the profits for advertisers. You can make a lot of money through super powerful targeting if you are a monopolist, but not in a competitive market.”

SAN JOSE, Calif. – Virtual PBX® and The Oya Group announced that the Virtual PBX Web site has been honored with two prestigious ADDY® awards, in recognition of its high-quality design, unique approach and ease of use. The awards were given in the business-to-business category at the regional Northern California and local Silicon Valley competitions.

The ADDY Awards are presented by the American Advertising Federation (AAF, at www.aaf.com), and are the world’s toughest advertising competition. The ADDY Awards represent the true spirit of creative excellence by recognizing all forms of advertising from media of all types, representing some of the best B2B advertising in the world.

“We are extremely honored to be recognized as an ADDY award recipient at both the local and regional level,” said Karen Hebert, CEO of The Oya Group. “Our collaborative work with Virtual PBX illustrates our dedication to our customers. We’re very pleased with the re-design of the Virtual PBX Web site, as this particular project allowed our team to have creative and strategic freedom to push our design process.”

When Virtual PBX brought The Oya Group on-board, the company wanted a complete re-design of the look-and-feel of the Web site while enhancing usability, increasing sales conversions, and maintaining search compliance. The ideal design would integrate Virtual PBX’s status as the inventor of hosted PBX services and industry innovation leader with a strong customer service commitment. Since launching the new Web site in November of 2008, Virtual PBX has seen an increase in Web traffic and a significant boost in online sign-ups.

“The Oya Group did an incredible job of guiding us through the design process to create a Web site that stands above any of our competition,” said Greg Brashier, chief operations officer for Virtual PBX. “Our new Web site draws in users and is an integral part of our successful business model.”

About Virtual PBX

Virtual PBX believes you never get a second chance to make a good first impression – especially when it comes to serving your customers. Our hosted PBX phone service gives small and growing businesses a professional, fully automated call answering and routing solution that can be up and running in a matter of minutes. With Virtual PBX, your employees, whether in one location or far-flung, can focus on serving your customers while we provide the advanced features and responsiveness that give you a competitive edge. We also offer a backup phone service to ensure your business stays up and running should disaster strike. For more information on how your business can benefit from our innovation and passionate commitment to great customer service, visit us on the Web at www.virtualpbx.com.

About The Oya Group

The Oya Group (www.oyagroup.com) is an award-winning, full-service marketing agency located in Los Gatos, CA. A seasoned team of professionals, supported by a wider network of specialists, Oya’s services span traditional marketing and advertising to more specialized services such as branding, Strategy and online marketing. Clients range from high-tech to mobile marketing to facility management — and everything in between.