In the last 2 weeks, we’ve seen some pretty radical increases in daily revenue payout for our RMX Direct publishers.

From early last week up until yesterday, we saw new records broken almost every day. Since the start of last week, we saw an increase of over 40%. And for the month of March, our daily payouts to RMX Direct publishers has climbed 66%!

Now, obviously, more publishers have been joining. However, when that’s taken into consideration, our payout increases are still beating our rate of new membership.

Some of this can also be attributed to new ad campaigns coming into the Right Media Exchange — these are increasing daily as advertisers and networks are choosing to be part of our exchange.

Some of this is also due to an increased efficiency around our creative auditing strategies. While these strategies may be faster, they do not compromise our standards around auditing of creatives: every creative is still seen by two people. And if those two people disagree, it goes into arbitration. In the end, you get what you choose in your Media Guard settings. No one else out there in the advertising world really has something comparable to the power of Media Guard.

Are you still curious? Are you a publisher with a website? Do you want to make more money?

Become a member of RMX Direct.

You may have noticed that we’ve been rolling out a number of products and feature enhancements to help you make sure only creatives you deem appropriate serve to your sites.

We have Creative Tester, Media Guard (in beta), and now Creative Reviewer – our new and improved creative approval workflow.

Before we get to the new features, you might ask, what’s this all about? Why would I want to manually review creatives if I’ve already set up creative content restrictions?

This is a business decision that should be carefully considered because there are costs and benefits to either banning or approving all new creatives by default. (more…)

Mike Seiman is the CEO of CPX Interactive, a member of the Right Media Exchange.

eCPM vs. Total Revenue

While it is true that not all ad networks are created equal…it is also true that any publisher planning to analyze their ad network chains should select their comparison metrics wisely. My hypothesis…and I am always interested in hearing from publishers on their agreement or disagreement…is that most publishers have been trained to look only at the eCPM currently earned on selected inventory — rather than the total revenue they could be making on their entire inventory. If publishers are interested – as I suspect they are – in the total amount of revenue to their bottom line, they would be wise to read on….

In The Beginning

When ad networks first gained popularity, they focused exclusively on publishers’ “premium” placements – those served to only the first few impressions per unique visitor. As the first movers, these early networks (many of whom remain the most commonly known names today) had the luxury of filling only those publisher impressions that would make them the most money per impression. Naturally, publishers where too busy thanking these networks for the ease of “one point entry” inventory management to question if there wasn’t a more advantageous way to deal with their lower-tier impressions…rather than simply sending them to non-paying defaults.

Enter the “Lower-Tier” Networks

Progressive new entries to the growing landscape of ad networks soon realized that there was an opportunity… in fact, a need…for a platform that could monetize the very inventory that the original networks were declining. These networks, because of their ability to convert passed-over inventory into revenue, became known as “lower-tier” networks…delivering value for a publisher’s “lower-tier” inventory. In truth, allowing this moniker to stick was probably a PR mistake. While the term “lower-tier” carries unjust negative connotations…the reality is that these are more accurately described as “100% fill” or “no default” networks.

How They…(We)… Do It

So what’s the magic? How can these networks monetize 100% of a publisher’s inventory…and guarantee no defaults? The answer isn’t so complicated, really. By removing frequency caps and floor CPM restrictions on specific “less desirable” inventory – and then selling this inventory through in a real-time market-driven environment – the real value of this inventory is identified and secured. The market’s Invisible Hand defines maximum value where, before, there was seemingly none.

It was not long before publishers saw the value in this proposition, and enlisted these “100% fill” networks to fill their “lower-tier” inventory….while still leaving their “premium” inventory in the hands of their long standing relationships with higher profile networks. The “premium” networks were happy to default unused inventory to their “100% fill” counterparts, publishers were happy to be getting both their “higher-tier” and “lower-tier” inventory filled…and the “100% fill” networks were happy…for the time being…to have carved out a piece of the pie. But letting this scenario cement itself as the industry norm was likely another PR mistake made by the newcomers….

The Slight of Hand

High profile networks soon realized that their position could easily be in jeopardy if the newcomers started pitching their powerful market-driven platform for selling premium impressions. To reduce the likelihood of this, they cleverly focused publishers’ attention on the coveted metric of eCPM (effective cost per thousand). They would tout their ability to deliver higher eCPMs than the 100% fill networks as a way to scare publishers away from giving the newcomers a chance to deliver the premium inventory. And the truth is that these limited inventory deliverers did have higher eCPMs to show….of course they did…and here’s why:

If network A (a limited inventory delivery network) sells 5,000,000 of your impressions at a $1 CPM and another 5,000,000 at an $.80 CPM…then they have delivered and eCPM of $.90 and paid you $9,000. Meanwhile, if network B (a 100% fill network) delivers the same 5,000,000 impressions at a $1 CPM and the same 5,000,000 impressions at an $.80 CPM…but also delivers another 10,000,000 impressions of your “lower-tier” inventory at a $.50 CPM…then they may have delivered an eCPM of only $.75, but they have paid you $16,500…$7,500 more than the so-called “top-tier” network!

Which network has delivered greater value? Which network truly understands your ROI needs? Which network deserves your inventory management business?

The Misconceptions

Publishers have been trained to believe that “lower-tier networks deliver lower eCPMs.” But the truth is that eCPM is a metric based upon an average. To compare two entities using an average-based metric, you must be comparing apples to apples. Premium and lower-tier inventory are definitely not both apples…though both are found in the same fruit basket. A much better metric for comparing networks is obviously total revenue delivered.

Publishers believe that “lower-tier” networks can only deliver inventory with no frequency caps and no minimum CPM restrictions… characteristics of a typical “lower-tier” strategy. But this simply isn’t true. Have you ever asked your “lower-tier network” if they could offer you a second account with a frequency cap or a floor CPM in order to test out some higher end rates? This “premium” account could easily default to your already existing “lower-tier” inventory account and suddenly you could be monetizing your entire inventory with the same network.

The trick is simply to change your perspective, focus on the right metric and actual delivered value, and follow the ROI.

Greater Revenue May Be Right Under Your Nose

Though I cannot speak for every “lower-tier” network – I can certainly speak for ours when I say that, with the right software in place, a progressive network can optimize placements across all of their publishers to find the highest paying ad for each impression on each site, making every publisher as much money as possible on every ad call. Utilization of a market-driven ad delivery platform and dynamic yield management and CPM optimization technology, has positioned some younger, lower profile, ad networks to make some real noise in the industry over the next year.

One thing is for sure. If your 3rd tier network is using these cutting-edge techniques, and your 1st tier network isn’t, you stand to make a lot more revenue on a daily basis moving your 3rd tier network up in your chain. Many publishers have already discovered this and, as a result, the ad network landscape is changing quickly.

So think about your chains and decide if they really do make sense, especially if your “lower-tier” network is not really a “lower-tier network”…but is really an opportunity to truly monetize 100% of your inventory as efficiently as possible.

You’ll never know if you don’t give it a shot!

Jeannette Borzo recently wrote a story for Wired [article] about the rise of Netvibes, and its trend-setting creator, Tariq Krim. Netvibes is web dashboard that incorporates RSS-type tools for a seamless, attractive personalized “homepage”. The article focuses on how Netvibes itself does not show advertisements. In order to have any kind of advertising exposure to a Netvibes user, a company has to create a module, specifically for Netvibes, that is useful for something other than display advertisements.

The article stops just shy of predicting the demise of the online display advertising industry. “Soon,” it supposes, “online advertisers everywhere will have to drop their blinking pop-ups and make themselves useful.”

That’s enough to make a online advertising exchange nervous, until one looks deeper at what’s being offered.

When I open Netvibe’s default homepage, I see an example of what I could configure as a user. Weather forecasts, email notifications, RSS feeds from major newspapers, even a Flickr photo search. I’ve got all the information I could want, right at my fingertips - without having to navigate through the individual pages that actually house the content. If I want to read the latest story at the Times, I click directly on the headline. I don’t bother telling MLB.com which of the 31 teams I follow, I just pump their Spring Training reports directly onto my dashboard and click on what I find noteworthy.

In short, the only pages I view are traditionally three or four clicks deep. This is ad space we typically refer to as “non-premium” – the kind of inventory traded on the Right Media Exchange. If the rise of personalized dashboards actually devalue any online advertising, it will be premium, portal-site ads… the kind served to a user when they walk in the front door (this notion is slightly suspect- the article does address counter-points about the need for distribution of advertising dollars across multiple media). Even with a dashboard, I still click on the stories in which I’m interested, the blog posts that catch my eye, and the newest stupid video. These “non-premium” sites become more valuable than ever, because my dashboard is doing the navigation for me.

The Wired article is heavy on the revolutionary lexicon. Users will get “spoiled” by the services of this “technology bellwether” who could be, “once again, at the vanguard of a coming trend.” Sounds a little scary, but fear not. The real revolution will be in the value assigned to deep-down, non-premium inventory. Tools like Netvibes highlight the need for a system that allows for efficient, profitable trading of this type of ad space.
If you’re a member of the Right Media Exchange, you’re already ahead of this trendy tech curve.

With Google selling other media and advertisers ready to test an eBay-powered national cable marketplace, some publishers worry that automated, auction-based ad systems may be out to replace the brand ad sales executive.

There are many reasons why this won’t happen, regardless of whether these high-profile efforts are successful (Mike Walrath discussed this earlier.) But this doesn’t lessen the need for both media sellers and advertisers to start thinking about separate strategies for inventory used for branding and inventory best used for achieving performance objectives such as efficient reach or “cost per whatever” (hat tip to Dave Smith, Mediasmith).

Resource-starved ad agencies typically can justify high-touch treatment only for top advertisers, and their most strategic campaigns and media partners. Within these constraints, buyers need competent ad sellers who can simplify the arduous process of planning and buying online media and add measurable value to every campaign.

Meanwhile, media sellers realize that monetizing all of their inventory is too difficult to do alone, no matter how large and proficient the staff. Creating relationships and big brand deals takes time, teamwork and constant nurturing.

This sums up why ad networks prevail today. After top sites, category leaders and portals sell their home pages, section fronts and targeted deals, buyers and sellers still need to match ads with remaining inventory on hundreds of billions of pages. Networks can help, but no single network can fill your inventory without daisy chaining and the attendant loss of revenue and control of what’s happening on your own site.

All inventory is not the same

What’s a publisher to do? Start by acknowledging that you have two different types of inventory:

1. What your direct sales team sells to advertisers and agencies; and
2. Everything else.

The catchall includes what you currently offload to networks, plus house ads, makegoods, bonuses and other non-revenue filler. (Remember that Google AdSense is a network and Ad.com, ValueClick, et al are also networks, not “agencies.”) Your “everything else” may also include performance-based and other pre-emptible, untargeted campaigns scheduled to run “as available.”

Take an honest accounting of your inventory and your “everything else” may represent as little as 20 percent of total impression volume or more than 80 percent. Most publishers fall somewhere in between. (See results of an Insight Express survey sponsored by Right Media by clicking here and scrolling to bottom to download deck).

How do you turn “everything else” into meaningful revenue?

1. Get better at everything you do to attract and retain a valuable audience for your target advertisers. Field a winning sales team that can convert more of your leftover inventory to direct-sold deals. Then …
2. Realize that what remains after your best sales efforts is viewed by the market as a less-valuable commodity that can be most effectively managed and traded in an automated, auction-based ad exchange.

Get ready for more online spending

As brand dollars migrate online, advertisers often come up short in the scramble for prime inventory that is most suitable to use for creating emotional connections with audiences. Paradoxically, by creating two distinct inventory classes you may be better prepared to help them and to benefit from the expected growth in brand spending.

After you sell the inventory that everyone wants, you spend most of your time persuading advertisers that what remains is equally valuable. Don’t stop trying, but be smart about it. You won’t sell it all, and sending it to multiple networks merely invites them to bombard users with the same ads too many times, resulting in poor ad performance, low revenue and unhappy site users.

But if you separate your class 2 inventory from premium, impose proper quality controls, and manage it on a large-scale ad exchange, you retain control of what runs on your site, and force all of your networks and media partners to compete for every impression, assuring you of the best price for each impression.

Marketers may use an exchange to extend online reach after exhausting first-tier media buys. With the ability to frequency cap across networks and publishers, and a single interface providing uniform reports, this is an increasingly attractive alternative for advertisers. As a publisher on an exchange, you can access new advertisers that meet your acceptance standards and that bid higher for the privilege of accessing your inventory.

Yes, let’s have smarter, better prepared sales executives who know how to martial their media assets to meet marketer objectives and build lasting relationships. But remember that there’s inventory directly suitable for brand-building, and there’s other inventory that can perform better and yield more than it does now if managed well. As a publisher, you already have both types of inventory. Now you only need to learn how to use automated, auction-based ad systems to your advantage.