I’m not ashamed to admit that I love TV. I wouldn’t necessarily call myself a couch potato, but there are certain shows that I consider “appointment TV.” Grey’s Anatomy, anyone?
Maybe not as engaging as your favorite appointment TV, but interesting nonetheless, are the once-a-year TV upfronts. You know what I’m talking about. The one time each year when the networks trot out their biggest stars, hype their new programming and sell advertising before anyone has had the chance to see the finished product.
This summer, I eagerly read about the venerated TV upfront and the impact digital media has had on early sales and overall marketing budgets. As we all know, upfront sales are not what the networks hoped for as varying percentages of TV marketing budgets are being reallocated to online media.
Personally, I am excited about this shift because it means that online advertising is finally being taken seriously. On the other hand, I feel a bit of trepidation because it means we have to rise to the challenge and make very few mistakes. The pressure to deliver a positive ROI is even greater when the advertiser is brand new to online.
The online advertising industry has been expecting this news for years and I had to ask myself again why we care so much since we know that marketers don’t like the upfront buy. It might not have started that way, but over the years, over-zealous networks have left marketers feeling a bit bullied and vulnerable, and they were happy to have a good reason to reduce their participation.
So knowing that, why would we want to be in this position? We’d love for media buyers to plan a year ahead. In the online world, sometimes we’re lucky to get one week’s notice, so naturally, we’re jealous. There’s also nothing bad to be said about having a structured opportunity to talk to all of your clients on a regular basis.
So why isn’t this the best problem online publishers have ever had? It’s simple. Like most large sites, we’ve been selling out of premium inventory since the beginning, but now we’re facing shortages even of our least targeted, least costly run-of-site inventory. Because online marketing works so well we’re now faced with the problem of it working too well. Theoretically this would be a great problem to have. Simply raise rates across the board and assume that the market will bear the cost.
So why the concern? If we raise our rates whenever we need to in reaction to previously oversold months or quarters, we risk damaging great relationships with our long-time advertising partners, without any real guarantee that other buyers will pay the new prices and fill any possible shortfalls. That’s a big gamble for a publisher to take, but for now we don’t really have other options if we want to guarantee full delivery for all of our campaigns, which we do.
Periodic rate-raising creates an unpredictable marketplace for media buyers and publishers alike. Media buyers can’t put a site in their media plan and build useful ROI models if their top performing, larger publishers are constantly shifting rates upward, and publishers can’t assume that buyers will be willing to pay their new rates just because they’re selling out. It’s a no-win situation.