18 March 2014 | Blog
Most advertising inventory can be broken into two categories: premium and everything else. Premium inventory is valuable, and coveted, because of its context. It can be desirable because of high ratings, it can be desirable because the type of audience watching, it can even be desirable because the surrounding program cast a halo effect on an ad. As such, it’s traditionally sold well in advance, between buyers and sellers with longstanding personal relationships. Often, these deals come bundled with additional inventory bundled, helping sellers move less-desired inventory and helping buyers achieve a little more reach. You can think of it as a pyramid, with a small amount of very valuable premium inventory at the top, a larger amount of less valuable non-premium inventory at the bottom, and bundled premium/non-premium in the middle.
So how does a change to impressions-based sales affect this? We’ve talked before about how turning underutilized units into impressions and selling them as audiences can benefit both buyers and sellers. Advertisers gain greater effective reach and are able to target the specific audiences they want. Inventory becomes much more valuable, allowing inventory holders to earn higher CPMs and have a greater percentage of sell-out.
But what about premium inventory? It doesn’t make sense to turn premium inventory into impressions. The context surrounding those impressions is half the point. And no one really wants to disrupt the traditional sales process, which is built around trust and deep knowledge of what clients are looking for. Premium will go on being sold in advance, in person, and in context. But it will become less necessary to bundle in non-premium inventory, since sellers will be selling it more easily and buyers will be getting even better reach through audience-buying. When the non-premium inventory is removed, it frees up premium inventory to command higher CPMs, while buyers get exactly what they want and nothing they don’t.
Impression-based ad sales makes it easier for everyone to enjoy the benefits of more effective, efficient advertising. It brings new value to every step of the pyramid.