The Scarcity Debate
It's essentially population control for ads.
"At any other conference," said Mike Rich of comScore today at OMMA Premium Display, 'if said you had 35 per cent growth year over year it would be great news. Here it's terrible news. There's so much space to fill, prices are driven down."
That's why Rich is preaching the gospel of scarcity: ..."at the end of the day, the average CPM keeps falling. We have to find a way to constrain the number of ads online. We have to get to scarcity."
It sounds a bit extreme. But Rich maintains that there will be no "premium" display without a reduction of impressions. "We want to quantify and demonstrate that if you don't view an ad, that ad is worthless.". His company did charter studies on 2.6 billion impressions, over 400,000 sites. He said, " 37 per cent of inventory we ran was never seen at all. that translates to 800 million impressions served, but none seen. The problem exists on top sites as well as long tail sites, where 39 per cent of your spend is going nowhere," he said. "And this is just not a sustainable track."
He knows that scarcity is a polarizing concept:"From the buy side, it's phenomenal, a great step forward,you get make goods, and guarantees."
If you're a seller, however,"not such a good reaction. You're gonna have to provide make goods and guarantees."
But Rich maintains that reducing the number of ad impressions in the universe is the only way to create a sustainable economy. Otherwise, prices will keep tanking.
During the Q and A, Michael Rubin from Yellow Pages made a good analogy. "I feel like I'm attending an OPEC conference," he said. (When OPEC wants to raise the price of crude oil, it starts limiting production.)
Especially if the media ecosystem ever wants to charge more for "premium."