Tuesday, November 09, 2010

Why Do We Keep Doing What We Know Doesn’t Work?

According to the experts, one of the major problems with web advertising is that supply is far outstripping demand.

Last quarter, ad impressions in the U.S. hit 1.3 trillion. This is a 22 percent increase from a year prior. With supply outstripping demand, the rates for display ads have dropped considerably.

This leaves publishers one option. Run more ads to make more money, cluttering up the online space even more.

I don’t see how this can help in the long term. And what we should be thinking about here is the long term.

If the objective is for publishers to make a decent fee, and if the price they get for placing ads is dropping, perhaps the better option isn’t to run more ads, but to find an additional revenue stream.

What do publishers have that advertisers dearly want?

Data.

And what do publishers currently give away to media agencies so that they can do their predictive models and place their ads?

Data.

What publishers need to understand is that their data has great value for evaluating the effectiveness of creative, not just as a predictive measure for media buys.

In fact, advertisers can hold their creative agencies accountable for their creative output based on a publisher’s data.

Will advertisers pay an additional fee for this accountability?

You bet.

Are publishers taking advantage of this?

Not yet.

Instead they keep running more and more ads with less and less effectiveness.

Go figure.

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