In a recent guest editorial for the Interactive Advertising Bureau, Matthew Duder from eboss sought to rally publishers to the cause of justifying higher prices for their online display advertising.
Some of the points Matthew made (which, to be fair, have been articulated by many of my publishing acquaintances) left me feeling a bit empty.
Why? Well it’s because I have this vision of a demonstration run by site owners and someone is leading the crowd in a chant.
What do we want?
“$100cpm” roars the crowd
How do we support it?
“Not sure…” murmur the crowd “we’ll get back to you on that”
The point is that publishers have an absolute right to charge more for better quality ad solutions. However, they are tilting at windmills if they believe the best way to increase profit is to fix a price above market value and gradually move to it.
The proposition is fundamentally flawed for two reasons. Firstly, online is by no means a lock on any NZ marketer’s schedule. What if we were to say the average cpm for a display ad is $25 today and tomorrow that went to $100? That would put banner ads up there with the cost of some magazines. Fair enough if you want to foot it with the rest of the media but there goes your “more cost effective” proposition.
Secondly, many clients already believe that display advertising is expensive. Why? Amazingly, because they are comparing it to their Search campaigns (which deliver more clicks for less cost). This issue has already developed overseas [Online Search Ads Faring Better Than Expensive Displays]. To arrest this trend as an industry we need to provide more research to clients proving the positive impact of display advertising.
So how do I suggest publishers improve their margins (while continuing to invest in those high quality local content platforms that we all love)?
Suggestion One. Learn from Search and provide low cost technological solutions that make planning, placement and reporting easier for advertisers. Sure, having a large sales team is something to be proud of but lean and mean works just as well with online. Clients would rather see their support (or dollars if you prefer) going towards more efficient systems and better content rather than a sales teams salaries.
Suggestion Two. Get your editors to say yes most of the time. If you want to deliver solutions which have greater value (and can’t just be copied and shuffled around a network) get your point of difference, your content team, to work with the advertiser on projects that deliver real results. Clients will pay a premium for this (honestly, they will).
Suggestion Three. Charge more – for better solutions. This may be news to some people but there are already platforms out there that charge well over $100 per thousand and clients are happy to pay for it. Take a bow MediaOne Network and TVNZ OnDemand. How can they charge so much? Perhaps you should ask Greig and Mark but I can vouch for the efficiency of these online video platforms, the simplicity of the sales proposition and the targeting abilities of both.
In essence I am saying this: yes, let’s get more clients investing in online and yes, let’s get our current clients spending more, but let’s do it by raising their expectations, not their costs.
John Buckley (john@360interactive.co.nz)
John is the Digital Media Director at 360interactive, the online arm of successful local agency Media360. In a previous life he was responsible for ad sales at ACP Digital and raised the CPM of MetroLive’s home page to $100. As Bill said to Hillary, everyone’s allowed one mistake…
