Commentary: Advertising's Most Debatable, Overused Term: "Premium"
This article originally appeared in MediaPost
By: James Moore, Chief Revenue Officer at Simpli.fi
Transparency in advertising technology — especially when it comes to pricing — can often be difficult to find. I have worked on the front lines of digital advertising for the better part of 19 years. During that tenure I have rarely encountered a marketer who shares the same definition for the word, “premium.”
Labeling inventory as “premium” conveys a sense of additional value to media buyers yet the overuse and misuse of the word has come at the cost of declining buyer trust in vendor solutions. As technology advances the most valuable place for digital advertising is in front of the right consumer, at the right time, and in the right place — which is not always the page or content with the most views, on the newest release date.
Ad-supported CTV inventory exploding onto the scene highlights the fact that premium is officially the single most over used and debatable word in the industry.
The definition of premium continues to evolve with the advancement of AdTech and advertisers need to be wary of providers offering premium inventory with outdated definitions that do not align with the unique needs of their specific advertiser and campaign. Now, it is time to embrace a personalized buyer standard that supports each unique advertiser best.
A LOOK BACK:10 YEARS AGO
In the early-2000’s, digital advertising was young and growing rapidly. Almost every website — no matter the size or significance — had a direct sales team selling “exclusive” owned and operated inventory, and the majority of this consisted of banner advertisements. Remember, this was well before mobile, apps and connected TV (CTV).
Website publishers would participate in direct sales inventory consortiums to create scale, and these, of course, were ad networks. Back then, site retargeting was beginning to grow in popularity as brands leaned into the idea of buying a single ad unit with a specific message to a targeted user and measuring that conversion outcome.
As site retargeting and programmatic advertising began to grow in popularity, every publisher and ad network was screaming at the top of their lungs that their inventory was “premium,” which meant the newest content, the most trafficked pages. And, that the inventory in programmatic was remnant – in other words, the leftover, older and less visited content that is more difficult to sell.
Ultimately, three universally accepted conclusions emerged that would influence the digital advertising industry tremendously.
The ad unit that converted the consumer mattered more than which page the consumer was viewing and, as a result, inventory evolved into commodity.
Advertisers found more value in buying impressions on a per-impression basis in real-time, rather than buying impressions in bulk at elevated CPMs and unknown performance outcomes.
Publishers moved more inventory programmatically as advertisers found that buying their ad space this way was more efficient, and that in partnership with the SSPs, they could move their inventory with amazing controls (floors, advertiser blocklists, etc.). This was more profitable than employing large direct sales teams as they had done in the past.
HISTORY REPEATS WITH THE GROWTH OF AVOD CTV
When it comes to CTV, every network makes the same claim about their content as website publishers did 10 years ago. Premium content in the world of CTV is exclusive, the newest, and the most popular, while the inventory in their PMP deals and via the programmatic SSPs is largely remnant.
However, programmatic specialists have entered the TV space bringing an arsenal of data, technology and expertise to optimize real business outcomes such as online conversions and physical, in-store visits. Now, ad networks models have emerged as companies cobble together direct sold inventory to create scale.
Consequently, advertisers are once again forced into buying impressions in bulk at prices with undisclosed margins or buying impressions on a one-by-one basis informed by data via a transparent bid strategy they can control based on hard, measurable outcomes. For publishers, there is an opportunity to reach more brands ready to buy ad space in marketplaces, outweighing the cost and effectiveness of the direct sales teams. At a bare minimum, using programmatic sales pipes along with a direct sales team maximizes inventory sales opportunity across thousands of advertisers that publisher sales teams would not have otherwise reached.
At the end of the day, the story is still unfolding but the storyline feels eerily similar.
REDEFINING PREMIUM
Ask any buyer and they will tell you that ‚Äúpremium‚Äù is the most used adjective in sales presentations in 2020. However, the definition remains highly subjective. It’s a battle between content versus performance, and bulk buys with negotiated prices versus granular buys at a price the market bears. Clearly, we’re in for a few years of fierce debate ‚Äì especially as the digitization of TV continues to evolve.
Many publishers and buyers will try their best to hold on to existing methods for buying and selling advertising, while others will rush to the other side as they try to predict where the industry is headed.
What is clear, however, is that the definition of premium will be unique to every advertiser, and in turn, platforms can no longer just sell premium inventory as a blanket statement. Today, they must evolve with advertising technology and realize that premium placement, target, timing, branding, or online or physical conversion priorities may differ customer-to-customer.
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