For anyone who is familiar with online advertising, you no doubt have read stories about how convoluted it is. You might have read stories about CPM's fluctuating, more Web sites and publishers tinkering with a subscription model to offset pressure-packed margins from advertising, or even one story written in Mediaweek on the heels of the Interactive Advertising Bureau's (IAB) Annual Meeting subtitled "Web publishers totally screwed or aren't they?"
For anyone confused with how complex online advertising has become, you can thank the lack of complexity (and effectiveness) from traditional offline media, particularly print. Years ago, if you wanted to run an advertisement in a magazine that you felt fit your demographic, you would reach out to a magazine and they would quote you a price based on a "market-based" CPM. You would negotiate, and then place the advertisement. If a big brand advertiser, you would target high-end and high-cost publishers that fit your clientele and brand image. Direct-response advertisers might instead opt for advertising in a channel with a lower cost, such as Sunday circulars, knowing the campaign's success was based on a quantifiable ROI. The two advertising worlds rarely actually had reason to collide.
Technology, and the growth of the... Read more
