The past few years have seen a seemingly uncontrollable avalanche in the volumes of ad inventory available. This has initially been down to publishers – traditional and digital only – seeking to monetise their online properties, all of which has now been supplemented by the phenomenal growth of social networks and their desire to develop ad-funded models. The result has been a glut of non-guaranteed online advertising inventory which is far outstripping demand. In such a scenario, basic economics dictates that this oversupply will simply drive down prices.
Today, agencies are being forced into buying inventory for their advertisers ‘by the tonnage’ just to find pockets of inventory that perform well. This is inefficient, wasteful and expensive from their perspective and it also forces down yields for publishers, meaning both the buyer and seller are losing out. So, how can the industry combat this trend? Well, the answer is very much in the hands of the publishers.
There is an increasing desire by publishers to take greater control of their inventory and we are already seeing a number of things happening. The greater adoption by publishers of a closed network approach is just is one example. Secondly, last year in Germany saw the launch of Ad Audience. This collaboration of a number of the country’s biggest sales houses was set up to take control and leverage the value of their premium ad inventory to deliver key audiences for advertisers and agencies.
Interestingly, this sentiment around publishers taking control is finding resonance and support amongst agencies. At a number of recent events, I’ve heard agencies becoming more vocal in recommending that publishers should seek to limit the inventory in the market and stop selling themselves short. Instead of focusing too much on low-value inventory, they are urging publishers to look to package, sell and optimise premium inventory better as a value differentiator. For access to more quality inventory they would be happy to pay more for it.
I would recommend that publishers and ad networks should be looking to make better use of the expertise and tools available to help drive revenues and value when it comes to their online inventory. Whether it’s liked or not, the truth is all campaigns are increasingly being measured on some form of performance metric, although this may or may not be something identified to the publishers upfront. Publishers should therefore be looking to optimise premium inventory better, using the relevant platforms on offer. This will help both improve their fortunes by maximising the value of their inventory, while offering a better tangible ROI for advertisers, which will keep them coming back for more.
