Private: Intelligence

Last week I really got some people riled up regarding viewable ads.  Thankfully that was my intent!  The fact is this is an opportunity.  It’s an opportunity for a discussion regarding how to make online advertising more effective and more efficient, which will pave the way for the next 10-15 years of growth!

Lets recap, shall we?  Apparently, according to Comscore, 31% of all ads viewed online are considered un-viewable, for various reasons.  I made a statement that below-the-fold ads should be considered less-premium, and priced accordingly.  I stand by that.  The remainder of the viewable ads issue does relate to fraud, as well as to unloaded ads, etc.  My contention is a simple one; that if an ad is not viewable then it has no value.  That leads us to the issue of a price correction based on opportunity to see, or view, a relevant ad.

This area of pricing is where I think we should be focusing our attention.  One of the key drivers for the growth of online advertising has been supply.  Supply of online inventory far outpaces the eventual demand, however the availability of premium inventory has been finite, and prices tend to reflect that.  The integration of data, targeting and other creative applications of technology have done a good job at increasing the value of what was previously considered to simply be “remnant” inventory, and that application of technology should be recognized and rewarded, but there needs to be a perceived end to supply if we can realistically foresee an increase in the overall value of online ads.  To expect that we can increase prices against an almost limitless supply of inventory is false, and the viewable ads issue presents an opportunity for us to re-set the stage properly.

Whether or not you agree with my initial hypothesis of the proposed breakdown of viewable vs. non-viewable ads, you must agree there needs to be a way to increase the demand for online ads.   By placing a “premium” tag against standard ad placements and guaranteeing they are viewable, whether through third party verification or some other means, you can maintain a premium price.  The same goes for applying a brand-safe tag to that inventory.  If you can guarantee the safety of the message and that it was guaranteed to be viewed by the right person, then you have something to hold up against an increased price, and premium advertisers will value that, especially if those guarantees translate to increased performance for their messaging.  The performance is based on engagement, not click-through.

The same can be applied for long-tail inventory that is willing to undergo the same strict set of quality reviews, all of which are currently available to advertisers, though not established as standard must-have’s.  It is possible that if the industry can make a push towards these elements becoming a standard piece of the puzzle for online media buying, then the perceived value of the inventory will increase in the eyes of the audience.  If this happens, then we could also see the emergence of a true online upfront for advertisers, whereby advertisers look to lock in inventory early in the year because the laws of supply and demand will dictate that pricing could increase later on a spot or scatter basis.  In my humble opinion, all of these self-installed regulations would result in increased pricing for our inventory, and the increased value of the industry as a whole. 

Of course, this does mean that less valuable inventory on small to medium sized sites with no desire to take part in these regulations will end up with purely performance based inventory, but that’s ok!  There is nothing wrong with performance based pricing.  Google has proven that, and affiliate networks exist because they work!

Viewable ads is an issue that we can address and quickly, and if we tackle it properly it could be a boon for the entire industry.  I don’t know about you, but I was raised that a challenge represents an opportunity, and opportunity is a very, very good thing.  Don’t you agree?