Commodities and the Issue with Ad Networks

Great post by Michael Cohn on commodities here. Quoting Michael here:

A commodity, in the business sense, has two basic characteristics:

a) People want it.

b) They don’t want it specifically.

The setting that inspired Cohn’s post on commodities was the CM Summit Conference held in New York last week, where Wenda Harris Millard continued her comments begun at the IAB conference in February on publishers treating their inventory like so many pork bellies.

If publishers are selling their inventory like pork bellies they are doing it in the name of convenience. We all love convenience. At least most people do. I’m busy and so are you. Often people must sacrifice something for convenience. That soda costs more at the gas station than it does at the grocery store. That bank machine charges $1.50 to take YOUR money out but it is here and my bank is 10 minutes out of the way.

I get the fact that ad agencies and marketers can’t/won’t 1000s of web properties. But, does that mean that ad impressions are interchangeable? Of course not! Still I find so many people refreshed and surprised when they first learn that Federated Media (where I work) represents 150+ sites but sells them on a site by site basis.

There is a point however where convenience is trumped by other considerations. A friend once told me about the $30 a month he was giving to some random bank for transaction fees. I stopped buying meat at my local super market after throwing away numerous cuts of meat because they had spoiled.

Advertisers are doing the same. Of course they can’t work with 1000s of publishers and they need to get reach against their target. But must they abandon the selection process over where their ads live to make this happen?

4 Responses to “Commodities and the Issue with Ad Networks”

  1. 1 miconian June 18, 2008 at 12:52 am

    Thanks, Pete.

  2. 2 Darren Herman June 21, 2008 at 1:17 pm

    Her statement is fundamentally flawed. If you treat them like porkbellies, then that’s the mindset you are using.

    If you apply data to the impression, it becomes inherently interesting. The fact that you can buy them EASILY is a mute point and should not be argued, but that’s what everyone is responding to.

  3. 3 miconian June 25, 2008 at 1:37 pm

    I feel I should mention for posterity that the person referenced in my post (who didn’t understand the word “commodity”) was not at the FM Summit; it was a former colleague.

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