Improving Ad Performance Online from OPA: Duhhhh

Online Publishers AssociationIndustry trade group, Online Publishers Association (OPA), has discovered that media is more effective on premium content sites than on auto-generated, splogs created in Ukraine.

But, wait. There's more!

In today's MediaPost, Gavin O'Malley speaks with Pam Horan, president of the OPA, about the second of two studies funded by OPA using Dynamic Logic MarketNorms data called "Improving Ad Performance Online." In the first study, which you can download from the OPA site here, readers discovered that premium content is important for advertisers. With study #2, readers learn the same treat except this time it's "in spite of the economic downturn."

We like that OPA does DL studies. It would be nice if they did something more insightful, hard-hitting, useful. Can anyone really see agency or exchange media buyers using this data as reasons to purchase from a premium publisher?

The real targets of the studies appear to be ad networks who are seen as siphoning off direct business such as Specific Media's rumored huge deal with an automaker in 2008 where the automaker decided to go to an ad network with reach and scale rather than pay premium prices of the content sites.

Ironically, publishers are the ones enabling ad networks by providing the inventory. And the inventory is often from publishers of premium content sites.

My mother, my sister. My mother, my sister.

Where does the ad exchange fit in here?

In the near term, the advertising exchange is here to provide a marketplace for unsold inventory that a premium content site's direct sales team cannot sell. For media buyers, ad exchanges provide the scale and reach of an ad network and adds transparency which breeds efficiency - which improves ROI.

Long term, smaller, publisher direct sales teams will be focused on integrated sponsorships, and more and more premium inventory will be sold in the exchange model as advertisers and publishers realize cost efficiencies and liquidity improves. Yes, sales teams get smaller, but new opportunities open up for ad traders on behalf of the publisher.

There is no question that advertisers will be playing all sides of the fence for the foreseeable future as exchanges', networks' and content sites' pricing fluctuates in the chase for the almighty ad dollar.

One omission from this study is, logically, long tail niche content sites. After all, this study is funded by large, OPA web publishers. Long tail, niche content sites are ALL premium content sites for the right advertiser and these sites nearly always do not have direct sales teams. Their target audience can be very valuable for a nimble advertiser on the exchange.

2 Comments

  1. Just curious on how ad traders would work in the new "ad exchange" land? Would they trade their inventory on the exchanges on behalf of publishers? Can't the publisher put the inventory on exchanges already? Would the "ad trader" not be an unnecessary "middle-man" in the process?

    I can see how a specialist could work on behalf of the advertiser. The online "hedge fund" model, as demonstrated by the initial success of Varick Media, has shown this is possible.

    So how does the "ad trader" fit into the new model? The average online sales person will clearly need to upskill fast.

    Reply
  2. Agreed. Pubs can put their inventory on the exchange right now. But, the future for an aggressive publisher will be more complex where they will price their inventory per impression according to behavioral, contextual, geo segmentation and more - this is the next step for yield optimizers who will put more decisions in the hands of publishers "traders" if you will.

    Whether it's the publishers inventory yield management software or the exchange's or both, these will handle the heavy lifting for the pub traders who will guide pricing and watch the markets for opportunity. By the way, I think of the publisher or advertiser-side traders - as an ad trader.

    And here's where many pubs and advertisers aren't thinking, yet. They're going to turn into buyers AND sellers no matter their affiliation. Their specialization in trading will create opportunities. (This is the natural fit for the super ad trader a.k.a. ad networks.)

    I'm sure you can think of a few scenarios, but a publisher like the Wall Street Journal could implement a simple arbitrage strategy and start buying up premium ad inventory on financial sites and then re-package it to advertisers with low but profitable margins in addition to their own inventory. - Fairly basic but a new idea for publishers looking for revenues.

    As for the average online sales person.. I'll suggest that it's going to split in two. One type will sell the integrated, direct sponsorships, branding opportunities etc., the other seller will trade and sell the CPM inventory at the very least.

    Thanks for your question, Ciaran. Look forward to your thoughts.

    Reply

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