Buying Big Bandwidth

You’ve heard them whisper about it on the streets. You’ve heard television business correspondents talk about it with that look of confusion on their faces. You’ve heard reps champion it as something only their sites can provide. And finally, you’ve heard every interactive ad conference speaker extol its virtues and shout about it as the “NBT” (Next Big Thing).

No, it isn’t standardization. (Whatever happened to that, anyway?) And no, it ain’t buying rich media. It’s broadband.

That’s right, it’s all about broadband, baby.

Well, over a year ago, high-bandwidth Internet access was all anyone could talk about.

“When we have broadband, this thing is really gonna take off!”

“It will just take high-bandwidth access, and then everyone will be online!”

“You can brand AND get interaction. It’ll be like TV, only better!”

It never seemed to move anywhere, though. I remember reading an article last year in an erstwhile online news source that prognosticated that the arrival of broadband and high-bandwidth access was about five years away for the general consumer.

At the time, given the way things looked just 12 months ago, I’d have thought that might not be too far off the mark. And depending on what your definition of “general consumer” is, and what constitutes “arrival,” there may still be some water held by those words. If what is meant by “general consumer” is women 18-49, and by “arrival,” its being used by more than 50 percent of them well, yeah. Maybe it is still five years away.

But then why does it take six weeks to get DSL hooked up in my neighborhood? (I live in San Francisco, after all!) I see more ads now for DSL in this market than I do for regular phone services. There’s Excite@Home, which still hasn’t made much headway into most markets, but does continue slow, modest gains (my parents signed up for it).

AT&T, under its own name and via the access it has gained through TCI, is of course doing what it can through existing phone and digital cable to bring the consumer high-bandwidth access.

Now enter the free access players, like NetZero, which is planning to launch a free DSL service. Or FreeDSL, part of the Broadband Digital Group, which has launched its service and already has about 200,000 users wired and lit after seven weeks of being live.

All these providers proprietary or not, subscriber fee-based or not have one thing in common: They have audiences advertisers want. In addition, they are putting that audience on the web and giving them access to content that couldn’t very easily be moved across the Internet before, making them a market segment that advertisers can look for outside of their ISP.

More and more of my clients are asking for this audience. First, it was only an advertiser whose business was delivering content that required high-bandwidth access to be experienced in full. But other clients want it as part of the marketing mix because it allows them to be more creative with their… well, creative, and it allows them to test the premise that a complex rich media ad unit not only pulls better response but moves the branding effort along in tandem.

So, as a buyer, what do you have to know that’s different from those principles already being employed for the rest of your online buying?

Well, at first glance, not much.

Most buys are still structured as CPM deals. Go ahead and ask about CPC, but expect to be turned down. First of all, the audience isn’t big enough to yield the kinds of economies of scale necessary to make CPC deals fiscally viable. Secondly, the supply of inventory is restricted, and demand is high.

On the likes of Excite@Home, expect to pay $30-$35 CPM for ROS of the service. They’ll want to tack on upwards of $10 to that CPM if you want any run-of-category, but try the “Mexican public market” approach: Keep walking away from the table until you know they’ve met their price floor. You might get a few bucks back on the deal.

FreeDSL is offering a supreme deal for advertisers right now. Much like NetZero, the reason the service is free (though you do pay for the modem) is because of advertising. Well, FreeDSL is offering something like $4 CPMs for their ROS inventory. I imagine the out-of-pocket needs to be healthy, but you can’t beat this CPM for this audience.

Properties outside of the broadband service providers that can target those accessing the Net at high speeds will usually sell the inventory at only slightly higher CPMs than they would their regular inventory.

Then there’s Yahoo. Yahoo’s broadband and Broadcast.com network yield much higher CPMs, though I’m still uncertain as to why. When it was just broadcast.com, I was able to get $.15 CPCs on what they called “Gateway” ads, which basically was the advertiser’s web page pushed to a visitor that clicked a banner. Attached could be an audio file that streamed a message while the advertiser’s page was being fetched.

Other sites that will target this audience are IFILM, iCast, RealNetworks, Reel.com, and of course Shockwave. As you can see, most of them are entertainment concerns with multimedia content offerings.

How does it all work? Very well. Response rates are sometimes as high as 30 to 40 percent, though that’s on the rare side.

If you have a client who’s willing to be adventurous with creative and daring with an audience segment, go after the broadband user. There ain’t a lot of them, but there will be soon. And you’ll want to know how to skillfully buy against them before everyone else figures out they are there.

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