Who Moved My Digital Inventory?

USDA plans to buy 11 million pounds of cheese for $20 million.

1,224 US dairy farms went away in 2015.  – News item

Someone on CNBC called it “quantified cheesing.” It’s what happens when the government takes action on plunging dairy prices, due to the oversupply of milk, that are forcing dairies out of business left and right.  

Yep, Uncle Sam to the rescue. Under the provisions of the Agriculture Act of 1935, the USDA can step in to make cheese purchases using money from tariffs on imported ag products. Then it stores the cheese for subsequent distribution to food banks, school lunches, prisons and so on. It’s a win win. Felons can get cheesier macaroni, and the extra demand helps stabilize prices in an economic sector that we can’t afford to have collapse.

Now this bring several ideas to mind. Number one is that farmers, a large constituency of the Republican party, will probably have to temporarily stop complaining about Evil Big Government because they’ll be too busy saving their businesses with federal price supports. 



Another thing is that this will also be a great boon to the “cheese food” industry, the people who make individually wrapped slices of cheese-like substance out of vegetable oil, and I believe, recycled vinyl, because it’s ordinarily cheaper for the consumer than real dairy. With actual cheese prices plummeting, the consumer cost advantage of putting yellow Naugahyde on your bologna sandwich all but disappeared. So Big Government is helping two industries at once.

The third thing is: Hey! This might offer the solution for another economic sector that the society needs to remain secure! We can save the media!

After all, why is the media economy in free fall? It’s not just bots and ad blockers and poor viewability. The main thing is the infinite supply of content creating an infinite supply of ad inventory, driving CPMs down, down, down.

It’s the same physics of supply and demand that’s killing the dairy industry. Too much milk, too many ad avails, and prices falling accordingly. So here’s the plan:

Have the federal government buy about $20 billion worth of local-newspaper banners, sponsored Tweets and above-the-line Google searches. They can store the pixels in huge regional warehouses for subsequent distribution to needy prospective advertisers: inner city schools, the coal industry, Caesar’s Palace, the Archdiocese of Minneapolis, the Russian track and field team, etc. Come on…find a flaw in that plan!

OK -- you might think there’s an obvious problem. That the government shouldn’t have a financial relationship with media companies, because how can an institution that depends on federal largesse be trusted to be a watchdog of the folks writing the checks? And, you’re thinking, every time the audience sees an ad distributed through the Media Survival Act of 2017, we’ll be reminded of the unsavory money link between supposedly adversarial institutions. 

But don’t you get it? That’s the beauty part! As a practical matter, there will be no such reminders. “Quantified media cheesing” will be utterly invisible to us. The evidence, all of the evidence, will be hidden in plain view. Right? Because the evidence is the advertising itself.

And who the hell ever sees that?



9 comments about "Who Moved My Digital Inventory?".
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  1. Lubin Bisson from Qzedia Media Inc, August 29, 2016 at 8:49 a.m.

    But Bob, this is the biggest year EVER for ad spend - estimated to reach $178 billion.  What could our media be doing wrong?  Maybe it is not true that the media economy is in free fall?

  2. Paula Lynn from Who Else Unlimited, August 29, 2016 at 9:30 a.m.

    So now you can take your tongue out of your cheek and lick some cheese. No charge. ;)

  3. Greg Peverill-Conti from SharpOrange replied, August 29, 2016 at 12:46 p.m.

    The question is though, what percentage of that $178B makes it to media companies as opposed to agencies, ad tech companies and data providers? That would be interesting to know and would be a more accurate measure of the health of the media industry.

  4. Ed Papazian from Media Dynamics Inc, August 29, 2016 at 1:16 p.m.

    Greg, if the data are "net" dollars---less agency commission, all of it goes to the media for TV, radio and print media. In the case of digital, it seems that much of it doesn't get to the publishers.

  5. Jaffer Ali from PulseTV, August 29, 2016 at 2:36 p.m.

    Media is following what I term, "Moore's Law of Media"... with suppllies doubling every 12 months. Data is the new media (at minimum, "potential media"....we have alwasy been on both sides of the media equation, buying and we are BUYING...It has NEVER been a better time to be an online marketer. 

    The media cartel (large owners) cannot hide supplies and can talk all they want about no avails, but this is hog wash. Unsold media is near 90%! 

  6. Bob Garfield from MediaPost replied, August 29, 2016 at 2:45 p.m.

    Excellent question. What %age of gross revenue is siphoned off...not only by agency commissions, but by arbitrage and ad-tech middlemen? Considering the near absence of financial controls among the supposedly procurement-obsessed advertisers, my (wild) guess is 30%. But somebody must have a real answer. Anyone?

  7. Ed Papazian from Media Dynamics Inc, August 29, 2016 at 3:25 p.m.

    Bob, wasn't there an atricle in Media Post a while back where some study of digital media found that only 35-40% of the "media dollars" spent in digital went to publishers. The rest went mainly for media buying---mostly programmatic---and transmitting/indserting the ads on websites. I was astounded to see this. As a comparison with national TV, a typical media buying fee for broadcast network buying is around 1%---with variations above the norm in some cases---while national cable fees are higher due to the complexity of policing all of the ads as well as dealing with more sellers---2.5-4% is typical, again with variations. As far as transmitting the commercials to the networks and cable channels is concerned, they go direct to the seller who habdles all placements, hence the cost is minimal. I believe that the same thing applies to magazines and radio. Generally speaking, local market or "spot radio" like its TV counterpart, comes in at higher fees--3-5%---as it requires more work than national buys. If anyone has better or additional normative data I would like to see it. Anyone?

  8. Ed Papazian from Media Dynamics Inc, August 29, 2016 at 4:14 p.m.

    Jaffer, of course you are referring to digital media, not all media. Nothing remotely like what you describe is happening with TV, radio or print media, which garner by any reasonable estimate 85% of all branding ad dollars.

  9. Jaffer Ali from PulseTV replied, August 29, 2016 at 4:58 p.m.

    Yes Ed, I was referring to digital media...sorry for the confusion.

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