What do sites advise?
From a planning standpoint, the sites are quick to advise on best practices for making sure that inventory desired can be secured. There is no question that planning in advance is ideal. For ongoing advertisers in high demand content areas, annual planning and buying is advised. The portals advise getting the RFP discussion going two to three months in advance if specific types of high demand inventory are in the plan.
Andy Wiedlin of Yahoo says that "when clients don't plan ahead you risk disappointment." He went on to reinforce that demand creates pricing inventory problems and parried the line that others in his company have voiced in public that having an agency involved is most beneficial to an orderly marketplace. He did not regard the crisis as an inventory crisis, but urged that we need better planning.
Joanne Bradford, MSN's corporate vice president of global sales and trade marketing and chief media revenue officer says, "We're seeing demand outstrip supply in premium areas like the homepage. Demand has been unbelievable in the last 24 months. Four years ago ads on the homepage were $25,000 to $500,000 apiece; now they can be up to a million dollars a piece. We believe the reason for this is because direct marketers have figured out that online is a huge reach vehicle, creative has gotten better and companies are constantly improving targeting capabilities." She goes on to say that some advertisers try to book the MSN home page 12 to 18 months out.
Kathy Kayse, senior vice president of national sales for AOL, contended that they were not in crisis mode. While she admitted that certain areas are often sold out, they have been able to find solutions and that there is still inventory there for most advertisers. The key, she said was to generate ideas outside of high-demand areas with content. "A good example was the opportunity to work with Target in Q4. They challenged us to come back with a great idea. We worked with our programming team and developed a ticker on the home page that created a wish list," she says. The idea involved sales, marketing, and programming.
The automotive market is unique. New cars, used cars, aftermarket, dealers and regional dealer associations all vie for very specific inventory. The category is unique in that a major purchase is made over a short period of time (two to three months average in-market), then the customer is out of the market for at least two to three years. Competition is intense for the inventory, the result being a fairly organized organic upfront marketplace. At this point, some 70 to 80 percent of automotive inventory is sold for the current year and the upfront for 2007 is beginning to be defined. Actual up front orders for next year may not be cut until fall, but the marketplace is one of incredibly long lead times.
From a publisher standpoint, there seems to be a perspective that advertisers need to be less demanding as publishers feel they cannot be as flexible for every ad program. Publishers also want more information from the buyer as to how the sale is going so that they can protect inventory.
The late creative issue outlined above remains a major sticking point. One estimate was that a portal loses upwards of 20 percent of inventory by an average of one to three days due to late creative. The major sites say that they are going to start billing clients for ads that are ordered but do not run due to non-arrival of creative.
