Let me start off by saying that I love my sell-site brethren. They work terribly hard under extraordinary pressures to get the job done and the sale closed. They come up with creative ideas that are new and innovative and should, in a more rational time, be readily accepted by clients and signed off on as a matter of course.
In this ever-softening market, I have transitioned into a business-development role that has become a greater and greater portion of my duties, and I am learning how hard it is to sell. I had, for a long time, simply been the guy who showed up at a pitch meeting and talked as an enthusiastic media nerd about the virtues of online advertising. Now, I am SELLING my agency to prospects, following up with phone calls and emails, and basically doing all the things that I used to find annoying at best when being the one sold to. I now have a whole new appreciation for what the sales community has to do. Y’all earn every penny you get!
With all of that said, I have to point out a few harsh realities about the state of getting online inventory sold in today’s “irrationally repressed” market. The thing to remember, however, is that many of the conditions that have led the Web as an advertising medium to where it is today must be addressed and resolved if online advertising is to have a future.
Positioning the New Media
According to Robert Kadar of iWant, “Measurement and reporting metrics are not standardized. Publishers and media sellers oversell, overpromise, and underdeliver, etc.” I couldn’t agree more.
It is certainly difficult, if not outright impossible, to prove the ROI of television, but that doesn’t stop advertisers from paying $600K for a 30-second spot during “ER.” The issue is positioning.
The industry stuffed itself into a box by overemphasizing its own accountability, calling for advertisers to try this “killer app.” And it worked. But the advertisers who really went for it were other netcentric entities, not the Procter & Gambles of the world. Now traditional advertisers have tried out the medium with click-through-rate expectations because that’s how the medium was positioned to them, only to find that it disappoints. Accountability went from being an asset to a liability.
In the early days, if we stuck with insisting upon the medium’s value as an advertising vehicle like print or outdoor, it wouldn’t have grown as fast, but its growth would have been a lot more organic, and the medium might have found itself as part of a traditional marketing mix sooner.
How Targeted Is It?
And, yes, the costs per thousand (CPM) impressions charged by most properties on the Web are out of whack with what the rest in the media marketplace charge. I’m not sure wholesale pants-dropping is necessary, but I do think a re-evaluation of values is necessary.
Sure, the insistence upon how “targeted” the Web is can somehow justify the higher CPMs often used. But really, how targeted is the audience of a particular Web site? How many sites out there are independently audited? How many do “subscriber studies,” if you will, that more accurately profile their users? I’m sorry, but when it comes to this kind of data, @plan or Media Metrix can barely take the lid off the mustard, let alone cut it.
If the business is going to continue to insist on selling impressions, which I will forever rally against with every fiber of my being (we should be selling AUDIENCE, people, not impressions), then we are always going to have more supply than demand.
The only way to bring balance to the ol’ supply-demand equation is either to restrict supply or increase demand. The way this gets done when demand cannot be artificially promoted is with cost controls of some sort. If there is any demand at all, it will be found when price point is married to perceived value.
I don’t wish to offend my publisher and sales compadres out there, but let’s face it: The advertiser community is not buying what’s being sold. Sure, keywords still get a premium, and CNET still pulls down high CPMs; but, for the most part, there are a zillion impressions out there that go unsold every day. Because we’ve married ourselves to the damn impression, we’re stuck with too many of them.
But if the industry insists on sticking with impressions, the only way to sell them is to match their cost with the perceived worth; otherwise, we’re going to be making branding claims until we claim ourselves right out of existence.
As fellow ClickZ writer Tig Tillinghast has pointed out, cable tried the branding thing at first, and it didn’t work. Over time, however, it has gained in perceived value and is now, in many ways, on par with the rest of television.
Untargeted inventory, like run-of-site (ROS) banners on Yahoo, should be priced at CPMs comparable to that of outdoor. A banner on a Web site is like a billboard: You speed by it on your way to someplace else. Billboard CPMs are something like $0.80 to $1.00, at most. At best, a banner is a cross between a cents-off coupon and a hooker’s phone number in a London phone booth.
Does anyone really believe that an ROS banner on Yahoo is MORE targeted than a billboard on I-95? Truly targeted inventory is certainly worth more, but I’m not convinced that the 468 x 60 canvas is the right asset in all instances. Sure, it can do a lot more than it usually is allowed to; I think of Left Field and Freestyle Interactive’s Sun Microsystems campaign a couple of years back.
If publishers are willing to effect some of these kinds of changes on targeted placements within their sites, move the placement around, and “get jiggy” with the sizes, higher CPMs might be justifiable. They are not, however, justifiable above and beyond what is paid in other media.
The issue is thinking about online as advertising, not as some special silver bullet that can address all of our marketing needs. It is one more tool to be used in creating comprehensive communications packages and surround-sound marketing activities in this ever-more fractious environment.
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