The prices for online display ads premium publishers sell have been declining for a long time now. Buyers have dominated this conversation on how ad value gets defined. Buyers have all but said, “There is no value in these ads for just being displayed” -- and sellers are bowing their heads and buying into that story. As a result, the confidence of salespeople paid to obtain greater value for these ads is at an all-time low.
Native programs are a life preserver buyers have thrown to publishers, which will help keep CPMs afloat for a little while. “Viewability” should help publishers increase prices, which is likely why buyers are not pushing this as emphatically as one would think. Programmatically, the promise the ad tech stack companies make to premium publishers to help increase display CPMs is well-intended but fatally flawed. The collective tech stack businesses are built upon volume, so where is the incentive on their part for prices to continually rise?
These tech and contextual solution currents may change directions at times, but online display ad prices for premium publishers will continue to sink for the foreseeable future. That means publishers have to bring change into 2014. I believe that change starts not with a shiny new ad toy, but rather, with a brand new story about the audience they really deliver.
In online, site metrics tell the story about what a typical visit session looks like on a publisher’s site. I learned the following definition of an online engagement story from Kevin Mannion:
Site Metrics + Site Engagement = Online Engagement Story
The dirty little secret affecting these site metrics is that a very small percentage of a site’s users make up an overwhelming percentage of that site’s total page views (as well as time spent). Subsequently, these core users see a majority of the ad impressions served. So while advertisers think they are buying online based on scale, what they are really getting is a whole bunch of frequency against a site’s core audience.
Scale has always struck me as an odd buying objective with online because, unlike print or television where ads are priced based on the audience reached, online is sold by impressions, not audience size. An advertiser that runs 10 million impressions on a site with 10 million unique visitors doesn’t mean the ad reaches 10 million people. Common sense aside, scale has driven online buying decisions, which is why publishers (& buyers) ignore the impact of “bounce rate” (the percent of people who come to a site and leave immediately) on site metrics and subsequent online engagement stories.
Premium publishers should stop ignoring this impact and instead embrace it. In 2014, the story publishers pay good salespeople to tell well should fly in the face of scale by getting smaller. This new engagement story should focus only on the people who care the most about the site by eliminating the visitors who care the least from the plot.
Let’s look at an example of what happens to these engagement metrics when you take out “site bouncers.”
Old Scale Story
Total Uniques: 10,000,000
Total Page Views: 50,000,000
Page Views per Unique: 5.0
Time Spent per Unique: 1 minute, 40 sec
NEW Core Audience Story
Total Uniques: 10,000,000
Bounce Rate: 50%
Core Uniques: 5,000,000
Core Page Views: 45,000,000
Page Views per Core Unique: 9.0
Time Spent per Core Unique: 3 minutes
This new “core audience” story would simply be defined by the metrics generated from every person who visited a site and did not bounce. By default, these engagement metrics have to improve considerably, and the message changes from scale to “core” and “elusive.” Moving forward, I would explain in sales collateral that “our” site numbers are adjusted down to reflect our “core uniques” and the omission of the people who get counted as traditional uniques, but bounce and deliver very little value.
Now combine this new core audience story with a direct-sales-only ad package offering ad impressions that exclusively reach “our core uniques.” CPMs will immediately increase and then begin to consistently rise -- and, even more important, so will the confidence of your sales team as they tell a better story they are more comfortable telling.
Telling a better story about the value a site delivers to those who visit is critical in obtaining greater value for the ads sold. I recognize how counterintuitive this new story reads, but what is being said now is just not working. Premium publishers have a better story if they move away from scale and embrace the value that comes with being smaller.