@ EconAffinity: Publishers Debate: Not Enough Scarcity Or Not Enough Technology?
This story was written by David Kaplan.
Midway through a ContentNext EconAffinity panel about the new, larger display ads being tested by the Online Publishers Association this spring, Wenda Harris Millard, president of Media Link, summed up the desired effect of the new ad formatslarger canvases will not only allow for the inspiration of greater creativity, but will also mean less ads, less clutter and as a result, raise CPMs for publishers. And while she credited OPA President Pam Horan's effort, the problem is likely to persist, as sites continue to multiply, adding constant pricing pressure. And so, Millard, put it to the panel: "There's creative, there's analytics, there's behavioral targetingwhat's the answer?"
Michael Keriakos, co-Founder and president of Waterfront Media went back and forth with Andy Monfried, CEO, Lotame, on whether there's too much emphasis on using technology to drive advertising and not enough strategic thinking that will lead to scarcity. Keriakos: "I'd rather walk away from 7 percent of our revenue if we can create a better user experience, not just to create scarcity. That is what we should be talking about when looking at solutions." More after the jump
Get out of the kitchen: Millard then zeroed in: Does behavioral targeting increase ad revenue? Does it bring in new business repeat business at higher CPMs? Keriakos: "It's driving down on our business. What's going on in the kitchen doesn't look that good. But when it comes out, it looks delicious. As an industry we've been focusing excessively too much on what's going on in the kitchen. BT is great for direct response, but it doesn't move ad dollars."
Horse and buggy: Monfried practically leapt out of his chair to respond: "Technology has lifted CPMs. This argument was heard a 100 years ago by horse and buggy operators: 'Hey, we have all these horses that run great, ignore Henry Ford.' A 14-year-old kid does not want to stay on your website; he wants to pull your content to his. And behavioral targeting can help you make money on that." OPA's Horan shook her head: But only 1 percent of revenues are from BT (NYSE: BT). We should be focusing on the question is what sort of environment your ad is in. Monfried shot back again: "That's been the NYT's argument for years. There's so much they could have done. They could have benefited from microchucking. It was then Millard's turn to interject: "Is that a word, microchunking?"
Twitter's business model: Monfried concluded that round, saying, "Everyone in this room has a Blackberry, everyone here has a Facebook account. You cannot go back to the walled gardenyour content is everywhere and there's no going back." He later noted that the real questions for publishers is to rely on behavioral targeting based on content, purchase intent or social life. Getting back to microchunkingessentially slicing and dicing content into small, digestible partsMonfried doesn't think Facebook has enough data to do it as effectively as Twitter. "Microchunking is a better business model for Twitter. It will be their business model."
By David Kaplan