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.

This entry was posted on Thursday, March 22nd, 2007 at 12:23 pm and is filed under About Right Media, Right Media Exchange, Publishers, Publisher Media Exchange. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.