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The Value of Big Sites

  |  November 10, 2000   |  Comments

Sellers always try to increase the price of inventory by convincing buyers that traffic, reach, content, and media brand matter. What really matters, in media and in brand?

Throughout the history of media buying, sellers have naturally tried to increase the price of the inventory they have. They've argued that demographics, time slots, and other factors can mathematically work out to a buyer's advantage. But they also frequently appeal to this ethereal thing called "brand." This warrants some analysis, as there are, indeed, times when the brand of the media matters to a campaign, and there are many times when it does not.

Here are the arguments reps will employ to try to get online buyers to pay relatively high prices for media on very large sites:

  • We get very large traffic.

  • We have a greater reach.

  • Our content is branded, giving a patina of credibility to those advertising with us.

  • Someday, in a clutch, you will need us, and you better be good to us.

I know I'm going to get a lot of angry mail, but I venture to guess that in most situations, most of these arguments are specious -- they simply don't add any value to the advertiser. Any one of them could potentially be valid, but only in particular circumstances.

The first one, the large traffic figures, is the most useless factor. In traditional media, like TV or print, this matters. There, the more viewers you have, the more impressions the advertiser receives. Not online. Online, all the traffic is divvied up into precise lots that are given out only to folks who've paid for the particular impressions.

There is a rare situation where this is useful, however: If your advertiser requires a very large buy to be executed over an extremely short period, the high traffic will allow this to happen. Don't be fooled into thinking that this means you're reaching more people. You'll very likely be reaching the same people over and over again. I have seen instances where this was compatible with campaign objectives maybe once or twice.

Having a very large reach at a site is helpful only to those advertisers who are making buys so large that they are purchasing a relatively high percentage of the entire site's inventory -- something that is rarely possible or desirable on very large sites. When you purchase small lots of media on large sites, you can most times expect to reach a lot of individuals. It's only when you're buying one out of three impressions that you begin to worry about the sites reach versus gross traffic figures.

The "brand" argument is the toughest to figure out, largely because it's almost completely subjective. Brand does exist. Brand is useful in advertising. But does branded media give a greater value to advertising on its pages? Most times, no.

It direly matters who you reach, at what time, in what functional context, etc. It, most times, does not matter whether you reach that person in the deepest depths of BigSite.com versus NicheSite.com. I know of exceptions to this. Sometimes, with particularly new or shady advertisers, they like to give themselves a patina of credibility by showing up on a respected site. This can be useful, but I've seen most of these same advertisers gradually move their media buys to more specialized sites as they refine their targeting and as they react to the efficiency of their buys.

So why is it that the vast majority of advertising is done on these relatively expensive sites? The simple, sad answer is that it's easier to do it this way. It's a lot easier to start off with a list of the largest 50 sites and narrow it down than to start off with a list of 3,000 sites and try to find many more buys that add up to the same amount of media. Expensive as it already is to manage these buys and campaigns, ad agencies aren't eager to increase internal costs that they can't pass on to their clients. This is one of the fundamental conflicts of interest between agencies and clients that seldom gets discussed.

The large sites get larger as the inconvenience factors work in their favor. This is not something they should get heady about. A lot of automation products are being developed that may turn this situation around in the coming months and years -- that is, if the big ad networks don't buy up all these automation products and link them to the large site properties they own. Also, buyers are getting much more educated about what really matters in media and in brand. They've begun to figure out that the site's brand matters a lot less than the advertiser's brand and that buying one doesn't necessarily mean building the other.

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Tig Tillinghast

Tig Tillinghast helped start and run some of the industry's largest interactive divisions. He started out at Leo Burnett, joined J. Walter Thompson to run its interactive division out of San Francisco, and wound up building Anderson & Lembke's interactive group as well.

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