I am tired of listening to the same tired ideas.
As creativity coach Julie Cameron once said, "Nothing dies harder than a bad idea." This industry spends more energy defending and perpetuating
bad ideas than any I have ever witnessed. We cannot thrive in an environment that perpetuates bad ideas.
Here are the four worst arguments in our industry that need to be left for dead in a
ditch somewhere:
Terrible Idea #1: Advertisers will only buy from a few people. This is the other half of the incorrect idea that small publishers cannot sell direct. While
individual advertisers may only buy from a handful of properties, the collective group of advertisers needs to buy from thousands. A consumer packaged goods company might be best off buying Yahoo, but
a local retailer is most certainly better off buying from local sites.
If buyers are only willing to buy from a handful of companies, as ad networks claim, then why are there 400 ad
networks?
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Terrible Idea #2: Selling on CPMs is better for you. In less than 10 years, search has managed to capture more than 50% of all online advertising dollars by
reducing risk to advertisers in the form of CPC.
If display advertising was managed like Google, publishers would make more money selling on CPC.
The top 100 publishers
collectively generate 2,000% more page views than Google, yet less total revenue.
The problem is that publishers lack the technology to efficiently match advertisers with interested buyers.
Every single page view needs to be optimized against a database of hundreds of thousands of ad units, coupled with deep audience matching to maximize CTR. Add in better quality ad units, and you have
a killer combination.
CPC pricing is not bad for publishers. In fact, reducing risk for advertisers will enable you to charge more. It just needs to be accompanied by great technology.
Terrible Idea #3: aggregating content. Vertical ad networks that bundle and package inventory are stripping away your brand value.
The reason you don't see Viagra,
Cialis, or Levitra selling as generic erectile dysfunction pills, is because they would leave billions on the table.
Whether it is drugs or content, everybody makes less money when customers
buy generic.
You are in the business of selling your brand and audience to advertisers. You cannot tell advertisers a unique story when you are being sold by a third party as part of a
bundled package.
Terrible Idea #4. Channel conflict is normal. This is the craziest of all the ideas, the one that is most capable of destroying your business.
Some women pay $1,000 for a handbag because it has a high perceived value and they cannot get it anyplace else.
What do you think would happen to Gucci if you could buy the same purse
down the street for pennies on the dollar? Why do you think retailers have teams dedicated solely to fighting counterfeits? Why do retailers wait a season before handing off inventory to
discount stores? Why do they open their own outlet stores in locations so far from their regular stores?
Retailers learned long ago that they must protect their brand at all costs.
Brand management is the art of effectively leveraging sales channels to balance maximum distribution with minimum commoditization.
Customers catch on quick. If you sell
your inventory through multiple channels, customers will start buying from the cheapest one.
This is the real reason that ad networks continue to grow, yet total display ad dollars are
declining.
I am not a mathematician, but if you shrink the total size of the market, and add in another mouth to feed, you are guaranteed to make less money.
The Last
Word
We have enough challenges in our industry without chasing losing ideas.
Let's celebrate this Independence Day by using some independent thinking, and throw out the
ideas that are not supported by data.
Can I get an amen, brother?