It’s a good question to try to answer now and then, especially if you like your zzzzzs but you’re heaving too many late-night ohhhhs.

Here’s a shot at what might be troubling you if you’re responsible for sales executives calling on agencies and advertisers for ad dollars. Brood on these for a bit and we’ll deliver some insomnia relief later.

1. Unsold and undersold inventory.

It’s 3:00am and you’re reliving yesterday’s heart-pounding snatching of defeat from the jaws of victory. There you are, proudly presenting your record-breaking performance at the quarterly review. You know things are heading the wrong way when the CEO and CFO glance knowingly at each other. It falls to the finance guy to call you out:

“Why the hell are we paying ad serving fees higher than the revenue we earned on more than half a billion ad deliveries?”

2. Sales productivity.

Toss, turn … Maybe assigning one full-time rep to sell excess inventory to ad networks wasn’t such a great move. The CFO wouldn’t have cared as much if we weren’t also paying sales commissions on those deals. But he has no idea how hard it is to keep salespeople.

They all want to sell the same easy deals on the home page and section fronts. They all sell the same targeting parameters, sponsorships and rich media slots. And they leave me with tons of available inventory they say only the networks will buy.

How can I keep all my salespeople focused on selling the value of my site and audience when I have all this leftover inventory to get rid of?

3. Operational inefficiency.

Toss, turn … Then the CEO wants to know why, with all this unsold inventory, we turned away a great new advertiser and underdelivered others. He asks what we’re doing wrong? The marketing guy was a big help, telling the CEO that he delivered the users and new inventory I asked for, so he’s clear of blame. I start telling them about high-frequency impressions nobody wants, but they tune out and move on.

I ask my ad ops group for recommendations. “How about firing any sales exec who sells inventory that’s already sold?” gets the most high-fives.

Toss, turn … 3:45am … Might as well get up and start working on the problem. But where to begin? We’re making the calls, winning awards, expanding the audience, creating new products.

We need better sales training in the basics, that’s for sure. This is advertising, people. Do we understand our prospects’ marketing objectives and what they want to accomplish with their online advertising? Are we making the match between that and the value of the audience we deliver?

As for the leftover inventory, is its value really different from what we are already selling successfully? Are there tools that can help us uncover the value, bring more potential buyers to the table, and get them on board easily?

What about these ad exchanges I keep hearing about? Maybe there’s something there. Can a couple hours sleep and a couple of phone calls fix what’s ailing me?

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…)

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.

There’s lots of chatter about the need for a better metric standard than the page view. My colleague, Pat McCarthy, offers a nice summary as well as suggestions for alternatives to the embattled page view. Another interesting discussion is evolving where the page view is dead (illustration), and we are now also mourning the Death of the User.

I wrote a column on this 2.5 years ago (Pricing Your Identifiable Audience) arguing that advertisers buy people, not ads (let alone, pages), so we need to measure impressions actually made on people, not impressions served to pages. My context at the time was data-enabled targeting, which publishers can use to better identify and price different segments of their audience based on measurable value to advertisers.

This is a difficult business. Web publishing is too measurable when it suits our interests (advertiser unhappy with results) and always inconsistent from one source to the next.

Publishers only need to be concerned about a few internal metrics. Pat offers “revenue per unique user” as a meaningful indicator of a site’s ability to effectively monetize its audience over time. This is also a good way to speak to your advertisers, as in “(fill in the metric) per unique audience.” If you have confidence in your ability to apply effective frequency caps, you gain an edge over competitors who pulverize their visitors with uncapped ads long after someone has responded or shown that they never will.

Which brings us to the one truth: results. If advertisers do their jobs right, and you do yours, then you should be able to offer the right result for the right price. Can you show your advertisers a range of acceptable metrics that demonstrate the proper exchange of results they seek for value you receive? Do you know the value of an impression on your site as well as the correct price that will produce, for example, a new customer acquisition at or below the targeted cost by type of offer?

That’s a whole lot of data. It’s worth figuring out how to extract and use it. One way you can leapfrog your competitors in knowledge that improves performance is through open API’s that allow you to use non-personally identifiable data in ad server decisioning. Why fight the page views battle when you can win the war for results?

Every winter, our carpet “remnants” come up from the basement to absorb mud and snow inside every entrance to my home. My wife’s a stickler for neatness, so when you enter my house, your shoes come off. But the remnants sit there for a few months every year to catch whatever slush visitors manage to sneak past border patrol.

Useful? Yes. Valuable? In so far as they protect the flooring beneath them, sure. But calling them “remnant” implies that they have no intrinsic value. They’re leftover, unsuitable for any number of reasons, including odd size, color, uneven cut, pulls, holes, etc.

Is this how you think about some of your inventory? If it’s unsold, it’s available inventory. Maybe it’s harder to sell than your most desirable placements because it’s below the fold, deep inside a section of user generated content, or on a browser in Southeast Asia. But it does have value - probably a lot more than you think it does.

In a booming online ad marketplace, publishers often settle for a few checks from the networks that resell their “remnants.” But publishers are waking to a new reality - that undersold, available, non-premium inventory deserves a real strategy. Here’s why:

- Many publishers sell only a fraction of their total inventory at rate card value. This leaves sites with hundreds of millions, even billions, of available impressions.

- Direct response (DR) advertising online is enormous and growing. Thousands of DR advertisers will test your inventory and they will compete among themselves to pay you handsomely for inventory that meets their goals.

- It’s easy to introduce competition for your available inventory, scale a non-premium ad business, ensure successful performance, and manage it all efficiently.

Right Media’s Publisher Media Exchange (PMX) enables large publishers to execute a strategy for increasing the amount of profitable revenue they derive from non-premium inventory. Prior to creating an open media exchange, these companies share such challenges as: unsold inventory, especially in international markets; inefficient inventory management due to existing ad server’s inability to handle the special demands of non-premium inventory; loss of impressions and revenue to complex, multi-network daisy chains; lack of advertiser and price visibility. Following are some examples of how PMX addresses these and other issues:
- Achieving scale efficiently

Source here

- Monetizing all inventory
A publisher generates 500-million impressions outside the U.S. and barely monetizes any of it. Within six months of introducing competition for every impression, they realize $50,000 to $60,000 per month for the same inventory that previously produced nothing.

- Creating competition among networks
A publisher working with five networks turned a daisy chain into an array of networks. Every impression now invites competitive bids from the original networks plus additional partners. Revenue for the same inventory increased by more than 30 percent in the first 90 days.

Are you allowing visitors to walk all over your “remnants” as they do in my house? Let’s start thinking about our available inventory as assets and accepting nothing less than full market value for every one.