No Problem More Pressing…

There is no problem more pressing for publishers with legacy print products than the drop in value of a reader as he moves from print to online. A few weeks ago Ari Rosenberg addressed this problem in a post on Media Post’s Online Publishing Insider. Noting the incredibly low CPMs ad networks bring, he made a couple of points about how to move those prices up:

  • Maintain pricing. He noted that Peter Naylor, the senior vice president of digital sales at NBC Universal, has advocated not filling an ad position if no ads are sold at a premium rate. “…just because there is an ad spot built into a page view doesn’t mean we have to serve an ad.

  • Preemptable inventory. “Ad network buys we accept are preemptable — so why not apply that
    same logic with our own direct sales force? Stick a stake in the ground
    and tell your sales force that anything sold below a CPM of X has no
    guarantee of running.”

I would also add another growing trend – limit inventory.  Limited inventory means more visibility for ads that do appear and the ability to charge higher prices as demand grows. Ads should fit in with the design of the page, not be allowed to design the page because you need to constantly fit in another unit that just might sell.

In the comments, Leslie Laredo noted that we actually do a poor job of selling the real value of online advertising – the “ability to guarantee delivery of an ad unit to a page when readers
(eyeballs) are there is a huge value. No other media can demonstrate
actual delivery of eyeballs to an ad or content on a page.” While R.J. Lewis points out that the responsibility for the performance of an ad lies with the advertiser as much as with the publisher, but CPC pricing places the entire burden on the publisher (one reason why advertisers like it).

We really have to get out of constant panic selling, where we have to sell every bit of inventory at any price because it’s perishable.

The problem, of course, will always be one of supply.  It’s so easy to create online ad inventory that it’s hard to imagine a general supply shortage. While recognizing that we are ultimately selling audience, as publishers we must also sell our brand.  Sure, it’s a valid argument to make that an advertiser shouldn’t care where they find their audience as long as it’s the right audience, but there’s more to it than that.  An advertiser wants to be associated with credible, reputable, valuable content, even though their audience may at times view other content, and many times the right content can further qualify an audience beyond the capability of behavioral targeting methodologies.

In the end, if publishers can’t sell the value of their inventory, who can?

2 thoughts on “No Problem More Pressing…

  1. I agree. Limiting inventory is one of the key things we need to do to increase the value of our online advertising.
    It’s basic supply and demand, and one of the things that — in an earlier age — made newspaper advertising as costly as it was.
    Increasing and maintaining the value of our advertising also enhances the value of the brand. For example, ads for snake oil and get-rich-quick schemes — and just seriously butt-ugly ads (Amish-built electric stoves, anyone?) — subtract from a product’s perceived value and can tarnish an established brand. Fewer and higher-quality ads have the opposite effect, on both current and potential advertisers and the audience.

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