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Why our price obsession is strangling display advertising

Why our price obsession is strangling display advertising Chris Cunningham

Think about your last visit to a five-star hotel. The service starts the second you walk in the door. You notice the quality around you, from the floors to the furniture, and when you enter your room you feel total comfort and relaxation. Later, when you get a bite to eat, you can tell the food at the hotel is high quality, and it tastes that way as well. They give you the little condiment jars, the napkins are cloth, and they constantly check to see if you are happy. When you check-out, you notice your bill had an extra digit in there and you know it will set you back, but then you tell yourself it was worth it. You paid more, but you got a better, high-quality experience.

Take that experience versus staying at the hotel near the airport. There is no service, the room smells odd, the sheets -- well, let's not go there -- and the food pales in comparison. When you check-out, you get your bill, sure you saved a couple of bucks, but what did it cost you? Undoubtedly, a good night sleep, a touch of indigestion, and, most likely, a wish that you had upgraded.
The analogy above holds true for digital advertising, especially in display. The last decade has been spent creating more inventory than anyone knows what to do with, using the same silly display boxes we all tend to ignore because we have been trained to do so. And, the statistics don't lie. A Harris Interactive poll in late 2010 found 43 percent of internet users ignore banner ads.  
All the ad networks, generally, target the same user base, and the ad community knows it so they aren't willing to pay much for it. When you have lots of inventory that isn't valued, performance suffers. This is the vicious cycle of digital, which causes most buyers to discredit the medium and not pay for it. This is why so many networks are coming out with new products that claim the ability to buy "viewable inventory." Well, if it's viewable now, what was it last quarter? You could say that's fair, but then why is it bought in the first place? Why are tens of billions of dollars spent in display every year if it doesn't perform and people ignore the ads?
So the question is when new quality inventory is available on either web or mobile, why is the industry so slow to jump in? Why are the largest platforms that create new inventory that performs not better able to drive demand for something better? It seems, when speaking to colleagues in the industry, the same frustration is experienced, which is this: making change happen. It is a slow process. Buyers get comfortable with who and what they know, and they aren't willing to pay for a five-star hotel or an upgrade even though the experience is better. Maybe it's because they are worried what their clients might say? Maybe they say it's unproven, but what happens most often is they don't want to pay the CPM, which is higher.
Clients should be forcing their agencies to only give them quality and valuable inventory. I would be saying, "Find it, bring it to me, and I don't care if it's not a company that hasn't been around for five years!" So many great companies we know offer quality and, actually, viewed inventory at scale, in rich media formats and video. But breaking through the old ways of buyers often seems impossible.

In order for this great industry to move forward, we need to focus on quality and think about the users -- the people! The best, new-generation publishers do this but they aren't being given a shot because they charge more. For example, at our company, we often lose a buy because our CPM is higher even though the buyers agree it's new, higher-quality inventory that performs well. They are going into the buy with a metric in mind that doesn't give premium or quality a chance because of the fixation on getting a deal for their client. Getting a deal is staying at a hotel near the airport. It's not a better experience.
I believe this can change when we change our mindset and think beyond what we already know. Most clients want to, but their hands are tied, which isn't their fault, but it's holding back innovation. It's holding back what we should be focusing on as an industry, which is less inventory and higher quality. We should all be staying in a five-star hotel and not be so worried about the price, instead thinking about quality and the experience.
Chris Cunningham is co-founder and CEO of adtivity by appssavvy.

On Twitter? Follow Chris at @chrisappssavvy and iMedia Connection at @iMediaTweet.

"Businessman with moneybox" image via Shutterstock.

Chris Cunningham is a digital advertising and technology serial entrepreneur with a love for mobile. His leadership and pioneering work in the space have led him to become a featured speaker at various global events, including International CES,...

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