Thursday, June 18, 2009

Publisher Yields Vs Advertiser ROI - Money Talks.

Risk free advertising. Only pay for the ads that work. At least that's the promise of performance media. Actually achieving this scenario, at scale, is part art and part science.

With the seemingly insatiable growth of performance based online media buying it is interesting to watch the 'ying and yang' of the publisher and advertiser relationship.

Publishers are reluctantly offering more and more performance based products to help monitised their unsold ad inventory and meet market demand from advertisers. They do so very cautiously in the hope they are not canabilising their premium products or placing too much downward pressure on their yeilds.

It's a tough spot to be in: millions of unsold ad impressions and huge market demand to buy this inventory on a performance basis. So what's a publisher to do? At least get some return on this inventory and sell it to the highest bidder, or, carefully manage the sell through to protect yields, often hindering the advertisers ability to get scale from their creative and product investments.

I have a number of clients who have uncapped marketing budgets - they will continue to invest in buying advertising as long as they can acquire leads or sales profitably. It's called sales lead advertising, but for too long traditional media publishers have conditioned marketers to think it should be the other way around with advertising lead sales.

So how do we bring both sides together to reach a win/win?

Publishers need to play nicer and do 2 things:
  1. Lower the barier to entry for test campaigns. Having high test campaign budget threshholds, or worse still, forcing the advertiser to pay on a CPM basis for test campaigns, sends a very clear message to advertisers - the publishers is not interested in a developing a long term win/win relationship.
  2. Enable better inventory targeting options on performance buys. Just by enabling advertisers to target who / where the ads are displayed is going to have a positive impact on yeilds as there won't be running hundreds of thousands of wasted impressions to an uninterested audience that never had a chance of converting anyway. The technology exists to do it, yet there is resistance for fear of devaluing premium products.
Advertisers need to focus on 2 things:
  1. Invest the time and resources in developing and testing optimal creative and landing pages. A key component in the publisher yield formula is conversion rates. Until advertisers can reliably deliver high converting campaigns (that back out to acceptable yeilds) the publishers are going to be reluctant to support the advertisers campaign. In most cases advertisers are better to compelete conversion optimisation and A/B or multivariate testing on traffic from a paid search campaign first and then once the conversion rates are optimised roll out the campaign through the performance networks.
  2. Paying the publisher as much as possible, within the bounds of their ROI objectives. Bottom line is money talks. The higher the campaign converts and the higher the payout rate the stronger the publishers yeilds. Which translates into more inventory alloacted to the advertiers campaign, mores conversions, more leads and ultimiately more sales.
As the performance media sector continues to mature it is exicting to watch the evolving product development of the publishers and the increased sophistication of savvy advertisers to optimise CTRs and conversion rates.


No comments:

Post a Comment