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August 25, 2009
OPA member slams remnant advertising

A leading member of two prominent trade organizations is firing back at the idea of "remnant" online advertising, claiming that low pricing is taking its toll on the industry as a whole.

"When all is said and done, there really is no 'remnant' inventory on the web, just as there is little to no real remnant inventory elsewhere," Jim Spanfeller, treasurer of the Online Publishers Association (OPA) and chairman emeritus of the IAB, said in a contributed article for paidContent.

His comments come at a time when more and more publishers, desperate for ad revenue, are turning to ad networks to help liquidate unsold inventory, often at drastically reduced prices. By dropping to these low prices, Spanfeller argues, publishers are reducing their pricing power and forcing media buyers to look at the wrong metrics -- clicks, sign-ups, and sales.

Spanfeller's main argument is that remnant advertising contributes nothing to the bottom line for publishers. He advocates that online ad units should be priced similarly to offline ones, and that doing otherwise will "tragically slow the growth of the industry."

Ad networks are continuing to be a point of contention within interactive, and an excess of conflicting studies seems to be increasing the confusion. Spanfeller's OPA recently released a report that found ads sold directly by premium publishers outperformed those sold through ad networks. Another study, from ad technology firm PubMatic, found CPMs for inventory sold through ad networks were on the rise -- which would be good news for publishers and conflict with Spanfeller's argument.


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