Last week at the Winning Media Strategies conference, AOL’s Platform-A called out the imbalance of supply and demand that currently exists in online display advertising.
With respect to ad impressions, the supply side has exploded in the past few years with the changing ways that people are interacting with online media. The increase in page views from things like social networking, for example, has created a glut of inventory.
The lowered barriers to online interactive services that are at the heart of Web 2.0 have likewise flooded, and fragmented, the market. We no longer see consolidation of traffic on major sites to the degree that we used to. The question then becomes, how do you maximize revenues during all these transitions?
Lynda Clarizio, former president and Eric Bosco, senior VP of operations of Platform-A gave a series of guidelines for Web publishers trying to answer this question:
— Be very choosy: With respect to where you put ad units, create scarcity to lift prices.
— Utility impressions: When possible, bring in social tools or widgets that can have higher engagement levels and can increase ad performance.
— Don’t be shy about testing: This includes A/B testing over ad placement, size, color, copy, etc. This is the business of yield optimization and companies like YieldBuild (which sat on our Digital Hollywood panel earlier this month).
— Bigger isn’t better: Don’t use ad units that take over too much screen real estate. — The future of online advertising will involve multiple platforms (mobile, social, search, video). Partner to gain access to platforms where you don’t “live.”
— Consumer experience is paramount: When doing all of the above, you can experiment with different revenue streams but consumer experience will ultimately drive longer-term revenues. — Advertisers are demanding accountability: This will drive the growth of mobile and search. For other formats, find ways to communicate ROI.
— Most display advertising happens at the top of the tail: the top 300 advertisers that make up for 90 percent of display ad spending. The goal is to move down the tail to attract more SMBs. There is an underserved SMB market, which is adept at using tools like AdWords but needs to be given better tools to create and manage display (a la AdReady).