A Pricing Revolution May Loom, But Context And Content Still Rule

There is much discussion about how a pricing revolution is looming in online advertising. Behavioral targeting and demographic profiling have the potential to drive ad revenues down, potentially hurting Web publishers. However, online publishers aren't out of the game yet and here's why.

Lower-costs seem appealing in the post-recession world, but short-term savings are short-sighted. For advertisers who care about brands, these issues have to balance against cost considerations:

Context: For publishers, there is significant value to be gained from proving and delivering the audience sought by the advertiser. Putting a great ad on low rent inventory reduces the value of your brand -- even if the audience is right. People put offers in context and you want yours to be spot on. This is why a vertical ad network makes more sense for advertisers: publishers and subject matter experts are more reliable judges of quality context than any computer algorithm on its own.



Latency: We are a long way off from individual targeting in real-time. Neither comScore nor Quantcast can offer that. And retargeting from within ads, while possible, does not ensure that the viewer being cookied fits the desired profile. Now you are pursuing someone for no confirmed reason.

Coverage: Most data sources can only confirm about 20-40% of the impressions as fitting a particular profile. Data experts then use statistics to gross up to 100%. It's not clear that this more accurate than trusting real editors to judge context and quality.

High Impact Advertising: The best advertising makes an impression because it's in context and it's entertaining. Large publishers and vertical ad networks are uniquely capable of delivering breakthrough advertising such as roadblocks, overlays, widgets and videos, in a personally vetted context that will resonate with your audience.

To avoid a severe case of being penny wise, but pound foolish, here's a wiser approach for advertisers:

1. Focus in on quality content -- especially the niche independent publishers where educated and affluent Web visitors seek out information about their interests and passions. Those are the sites that can be reached through vertical ad networks.

2. Add retargeting on those quality content sites, where you can accurately assess the demographics of those sites visitors better than through individual impressions alone.

3. Retarget the community of visitors you want, but be careful as you select the outlets where your retargeted ads will display.

4. To ensure that you optimize your campaign to the audience (rather than the click) insist on site- and line-item-transparency, as well as post-campaign (or mid-campaign) demographics reports.

A word to the wise: over-relying on $3 retargeting can damage your precious brand in the long-term, in the interest of a short-term burst of clicks. That's a price you don't want to pay.

1 comment about "A Pricing Revolution May Loom, But Context And Content Still Rule".
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  1. Joshua Rex from AP, April 27, 2009 at 9:19 a.m.

    Great article Joelle in response to the BW post. I for one totally agree with you're POV. The demographic profiling/behavioural targeting approach fails to recognise the fact that impressions are a relic of the print age and that engagement NOT impressions is what really counts. The fundamental assumption here - erroneous at that - is "This desirable reader is back". One what basis are they desirable? Just because you cookie my and then follow me around the web doesn't mean I have any interest in the ads displayed. Surely it makes a lot more sense flip this logic?

    How about <strong>paying a premium for engagement</strong> rather than pennies to generate more noise.

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