Outgoing Forbes CEO Jim Spanfeller argue that it isn’t in this article on Paid Content – http://paidcontent.org/article/419-publishers-are-killing-web-advertisings-potential-with-misguided-pricin/
Some interesting excerpts …
“The web has advantages in providing a platform for advertisers, but the notion that it is some sort of new animal entirely has grown out of a variety of misconceptions that have worked to radically slow the eventual migration of ever-larger advertising budgets online.”
“In buying into the notion of remnant, publishers have vastly reduced their pricing power. They are training the buying community to fixate on the wrong metrics, and for very little near-term return. At the end of the day, the inventory that is now getting sold as remnant, mostly through horizontal ad networks, is generating so little revenue that it is inconsequential to the bottom line of the business.”
It appears that two things are happening locally around this sort of area. The ad networks are becoming larger sellers of inventory volume and also capturing a larger share of the overall display pie.
However, from all conversations I have had … most if not all publishers involved in partnering with a network are unhappy about the yield they are receiving. In many instances … the yield they are getting from a network is less than 5% of what they would be getting dealing direct with advertisers and selling on a reasonable CPM.
Now there’s only 1 group who should shoulder the blame for this and it’s certainly not the ad networks, it’s the publishers. Instead of trying to work out a smarter way to price their inventory and generate revenue they’ve turned to the easiest, cheapest solution which is to outsource it to someone else and share the revenue.
Inventory tiering must be looked at by the main players sooner rather than later. Otherwise the race to the bottom will be over a lot quicker than most expect.