NONE: Re: ONLINE-ADS>> Is targeting a bad thing when everyone does it??
Re: ONLINE-ADS>> Is targeting a bad thing when everyone does it??
Heidi Kay (hkay_at_flycast.com)
Wed, 27 May 1998 16:09:23 -0700
The problem for sites offering targeting is really one of inventory
management. Once you've sold all your "targeted" impressions, what do you do
with the remaining inventory?
This is similar to the problem airlines face when filling seats on an
airplane. Each seat on the same flight (in economy class, at least) is more
or less the same and should have the same price. Yet just about every
passenger winds up paying a different price, based on the perceived value of
each seat to each passenger. Some travelers plan in advance, shop around,
and lock in the best deals. Others fly without restrictions and must pay
more for this flexibility. Unsold seats may be sold cheaply at the last
minute to buyers who are willing to risk not getting a seat at all in order
to get a low price.
The same scenario is true on the web. Virtually nobody buys at rate card.
Instead, each impression is priced according to its value or desirability to
each buyer. If the inventory is about to expire -- if the plane is about to
take off with empty seats -- the impressions may be priced very low in the
hopes that the site will get at least something for it. Targeted impressions
may be sold in advance to buyers who want to lock in these impressions up
front. Untargeted impressions will then be sold in real time to general
buyers at a lower price, just before they expire.
These untargeted impressions are emphatically not "leftover crap," like old
sneakers at a rummage sale that nobody wants. An impression is an
impression, a viewer is a viewer, a plane seat is a plane seat, regardless
of whether you paid $3 or $300. The difference is the timing.
For sites that work with a network, some of this unsold inventory can be
shunted to a Run of Network (RON) pool, an example of which is Flycast's
Blind Buy. In Blind Buy, unsold inventory is made available at low CPMs,
without revealing to the buyer the sites on which they are buying. This is
an excellent way for sites to sell the "leftover" inventory and for buyers
to test their message against a broad, diverse audience at low cost.
Of course, not all sites want to shunt their unsold impressions to a cheaper
RON. They perceive RON as "low quality" and would rather get $0 CPM than
$3-$5 in RON to protect their brand and market perception. For many sites,
however, RON provides an incremental revenue stream for otherwise unsold
impressions, without channel conflict, since buyers do not know the exact
sites on which their banners run.
----------------------------------
Heidi Kay
Product Manager
Flycast Communications Corporation
181 Fremont Street, Suite 120
San Francisco, CA 94105
http://www.flycast.com
tel: 415-913-1568
fax: 415-977-1009
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