Commentary

What's For Sale?

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 to showed up at a pitch 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. I now have a whole new appreciation for what the sales community has to do. Y'all earn every penny you get.

Now that I've gotten that out of the way, 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 us here, as an advertising medium, must be addressed and resolved if we are to have a future.

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I think that the MOST important issue is:

"Measurement and reporting metrics are not standardized", "Publishers & Media sellers oversell, over promise and underdeliver, etc."

It is certainly difficult, if not out right impossible to prove the ROI of television, but that doesn't stop advertisers from paying $600K for a :30 spot in ER. The issue is positioning. The industry stuffed itself into a box by over-emphasizing it's own accountability. That was the "killer app" the medium thought it needed to get advertisers to try it out. And so it worked. But the advertisers that were really going for it were other netcentric entities, not the P&Gs of the world. Now traditional advertisers have tried out the medium with click-through rate expectations because that was how the medium was positioned to them only to find that it disappoints. Accountability went from being an asset to a liability.

If in the early days, 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 it's growth would have been a lot more organic and the medium might have found itself as part of a traditional marketing mix sooner.

And, yes, the CPMs charged by most properties on the web are out of whack with what the rest of the media marketplace charges. I'm not sure wholesale pants-dropping is necessary, but I do think a reevaluation of values is necessary.

Sure, the insistence upon how "targeted" the Web is can somehow justify higher CPMs is oft 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 profiles their user? I'm sorry, but when it comes to this kind of data, @plan or MediaMetrix 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 in the ol' supply-demand equation is either to restrict supply or increase demand. The way that gets done when demand cannot be artificially promoted, from what I remember in my high school economy class, are 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 C|Net 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 the impression, the only way to sell them is to match their cost with the perceived worth. 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.

Otherwise, we're going to be making branding claims until we claim ourselves right out of existence.

Untargeted inventory, like 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 some place else. Billboard CPMs are something like $.80 to $1, at most. At best a banner is a cross between a cents-off coupon and a hooker's phone number in London phone booth.

Does anyone really believe that an ROS banner on Yahoo is MORE targeted than a billboard on I95? Truly targeted inventory is certainly worth more, but I'm not convinced that the 468x60 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 years back (http://www.freestyleinteractive.com/clients/case-sun.html).

If publishers are willing to affect 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 are paid in other media.

The issue is thinking about online like it is advertising, not like it is 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.

- Jim Meskauskas is Chief Internet Strategist/Media Account Director at Mediasmith, Inc., a San Francisco and New York based Interactive Media Agency and Consultancy.

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