Pivotal Research Group’s Brian Wieser likes to call it as he sees it, and sadly for premium online publishers, he just doesn’t see it for them. During a keynote presentation at OMMA Premium Display in New York, Wieser made the case that online publishers are more or less between a rock and a hard place, because there’s simply not much on the horizon that will stimulate any real growth in their marketplace.
The main reasons, he said, was that there is no extraordinary demand for the medium coming from new or emerging ad categories.
“In case you can’t guess my bias,” Wieser quipped, showing a slide with his presentation’s title, “Life or Death of Premium Web Advertising,” which features an image from the movie “Weekend at Bernie’s” with two characters propping of a decidedly deceased Bernie.
“The reality is I just don’t see a lot of growth. And there are real practical reasons why what we have historically seen as premium display is facing real challenges,” Wieser said, adding that it is a double-whammy of a “macro environment” (you know, the economy) “without meaningful growth” and the lack of any real endemic category demand for online publishing.
To illustrate, online publishing’s dilemma, Wieser cited the dynamics that propel network TV’s famed – and coveted – upfront advertising marketplace, in which a “small number of broadly identical sellers” “passively collude” to create a market of “information asymmetry” that has put the sellers in the “dominant position.”
“In a world of zero percent volume increases [for the rest of the media marketplace] you can get 8% pricing increases every year,” Wieser said of the network upfront’s unique marketplace dynamic.
“I’ve taken 25 years of data,” Wieser said, noting that the trend is “pretty much holding” and that nothing is likely to change it anytime soon, unless advertisers “change their preferences.”
The online publishing marketplace, Wieser characterized, as being the exact opposite, because the information asymmetry favors the advertisers and media buyers.
“It’s in the hand of the buy-side,” he said. “That information asymmetry goes the other way and creates deflationary conditions. When you have deflationary conditions it deters investment. The industry gradually eats itself alive.”