Last week I got some people really riled up about viewable ads. Thankfully, that was my intent! The fact is, this is an opportunity to discuss 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: 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.
I think we should be focusing on this area of pricing. 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 has done a good job of increasing the value of what was previously considered to be “remnant” inventory. 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 reset the stage properly.
Whether or not you agree with my proposed breakdown of viewable vs. non-viewable ads, you should agree that there must 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 will be viewed by the right target consumer, then you have something to hold up against an increased price. 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-haves. If the industry can push to have these elements become a standard piece of the puzzle for online media buying, then the perceived value of the inventory will increase. If this happens, then we could also see the emergence of a true online upfront for advertisers, in which 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 higher prices for our inventory, and increased value for the industry as a whole.
Of course, this does mean that less valuable inventory on small to medium-sized sites that doesn’t fit 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!
This is an issue that we can address 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 to think that a challenge represents an opportunity -- and opportunity is a very, very good thing. Don’t you agree?