• by Ryan , Anand Subramanian , September 25, 2008

Last time I checked, gold was selling at $822.70 an ounce. Although I am not a gold trader by any stretch, I noticed this fact the other day, and I thought about how shocking it would be if one of the financial advice trades urged me to sell my gold assets at $400 an ounce.

Yet, something very similar to this nonsense seems to be happening with unsold online ad inventory. There's gold in that inventory. If there weren't we wouldn't see a surge in media companies finally realizing substantial digital media revenue. NBC is claiming $25 million from the recently closed Olympic games. CBS posted a similar figure for the Final Four. The New York Times' took a few darts for not appreciably increasing its digital revenue in its most recent quarter, but $91 million is a real business.

Let's take the gold analogy a step further, because sometimes that gold needs to be sought out, sifted, and monetized in the midst of less valuable assets. Imagine if each web publisher treated its unsold web inventory like a bag of salt that contained 10% gold ? If some one came along and took all the salt bags and sifted them to create full bags of gold, well that pile of gold would certainly be worth a lot more than the salt. The point here is that we need to find that gold, and current web publishing staff levels don't have the ability to do so.

This situation is normal for any media. Some inventory even on the very top sites, remains unsold. Not a bad thing, mind you. But some web publishers (at the printed urging of some ad network and ad exchange executives) are unloading this potentially valuable asset like bags of salt, and throwing them out there with the gold content unmined. They're pushing the panic button when it's time for a cool-headed look at unsold inventory. Pulling in the reins on ad networks and exchanges that can bring context to content and bundling unsold pages for sale is a big mistake in the short term and a bigger mistake for any publisher that plans to be in this business long-term.

Here's the problem. Some web publishers are looking at their unsold ad pages and deciding they can do better than the ad networks and exchanges and they have begun to take that part of their business in-house. That's well within their rights, and I'm sure they're capable. But they should view unsold inventory as an opportunity, not a burden. This inventory all exists within a context. Maybe that context is boxing. Maybe it's coverage of an Elephant festival in Sri Lanka. But whatever it is it attracts a highly engaged audience with a passion for that content and I believe there are enough advertisers out there that want to tap the audience's enthusiasm for that content, within its context. And for that privilege web publishers can exact a premium price.

Unsold pages are not commodity products. But, to bundle them for sale as pages without content, as random digital entities that just happen to hold a banner space, is a mistake.

Advertisers need relevant content; publishers have it. However, so many brands are focused on search engine marketing that it's difficult to see past it. An obsession with search, for all its utility and current raging glory may be contributing to the short-sighted vision regarding unsold inventory. In order to truly drive digital media revenue, publishers will need to drive viewers deeper into their sites. Throwing more money at keywords may not be the answer.