A year after ESPN cancelled the use of Ad Networks (did anyone else follow suit?) there are rumours of UK publishers doing the same? Is this a myth or a mistake?
I understand why premium publishers are committed to maximising the value of their audience – and often the impact of using ad networks can diminish that value, especially if they are selling ‘inventory’ – or ad impression opportunities – on an undifferentiated basis – or selling ‘pork bellies’, as IAB (US) chair Wenda Harris put it last year .
But of course not all third party sales opportunities are about ‘stack ‘em high, sell ‘em cheap’. There are some credible partners in the marketplace who seek to add value to their networked sales approach. This is not selling pork bellies, but making ready meals, to stretch a poor analogy too far.
All of this reminded me of something I read in the Times this morning about the changes being made over at Unilever by the new chief executive, Paul Polman.
It seems that when, last year, Unilever raised prices on it’s ‘power brands’ at well above the rate of inflation (9%), one of the consequences was a drop in market share. It seems consumers, rather than pay the premium for the power brand, swapped to ‘own brand’ alternatives – note my earlier post about the sacrificial consumer.
Sandlines is of the opinion that we’ll see similar things happening in the online market: if some publishers decide to pull from the networks, they will lose some of their revenue, but it is highly unlikely that enough will do this to reduce the ability of those networks to meet their commitments to provide advertising opportunities to their advertisers and agencies.
In other words, they’ll lose revenue and gain little if anything.
As I hinted at the start, it might be worthwhile for a power brand like ESPN to decline to play the network gain, but it is unlikely to have much impact on the way the online advertising marketplace shapes up during the ‘interesting times’ we find ourselves in.
And, interesting timing, all this coincides with a period when many ‘power brands’ in the online display advertising market here are in the process of building their own ad networks…
What’s wrong with this picture?
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