Click-through rate (CTR) is often used to describe the advertising performance on a publisher’s site. CTR for an ad is defined as the number of clicks on an ad divided by the number of times the ad is shown (impressions), expressed as a percentage. If the ad sales team for a publisher claims 1 million monthly unique visitors with 4 million page views and a CTR of 0.2% (or 8,000 click-throughs), the buyer might think those click-throughs are all distributed across the million unique users to yield 8,000 unique conversions. The buyer and the seller are wrong. Here’s the problem: CTR doesn’t take into account audience engagement, not to mention the fact that other advertisers are competing for the click-through [...]
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Audience Reselling: Does It Drive Profits?
Posted by: Matt Shanahan In audience selling, a publisher sells impressions of a specific target audience to an advertiser. In audience reselling, a publisher sells the audience data to an advertiser via an aggregator or network. The decision to sell the data vs. the impression should be based on a financial model and expected returns. Interestingly, I haven’t found any models that help publishers make this decision. So here is my take. Using the math set forth by GCA Savvian, data aggregators on average get $0.50 of every $10 CPM, and publishers receive $3.60 of every $10 CPM. Let’s assume group of advertisers wants to buy 1,000,000 impressions ($10,000) to a specific audience demographic. Let’s assume there is a publisher [...]
Reverse Auction for Your Own Audience
Posted by: Matt Shanahan In addition to producing media, publishers also produce audiences. It is the combined uniqueness of the media and audience that are the source of revenue in their models. Unfortunately, that uniqueness is being systematically eroded and has largely been overlooked. Here’s why. Uniqueness of a product is critical characteristic if a supplier wants control over pricing. Look at the recent iPad offering as an example of where great margins are being earned due to the uniqueness of the offering. As competition enters, we’ll see the price of tablets drop dramatically. As discussed in this blog, publishers are selling audiences — audiences generated from their media. In audience selling, uniqueness is derived from the targeting data a [...]
Audience Reselling: Data Aggregators
Posted by: Matt Shanahan In the upcoming posts, I’ll look into the impact data aggregators (pure-play and ad networks) have on publishers. Do data aggregators provide bi-directional transparency? What are the implication of transparency? What are the issues associated with attribution of data sources? What realistic contribution margin can selling data have to the bottom line of a publisher? Data aggregators have been a big force behind the movement to audience buying. For the most part, they are the ones doing the audience selling, or reselling as it were. Essentially, they aggregate audience members from publishers and then repackage and resell them. Their goal is to build a big enough audience (i.e., pool of cookies annotated with rich information) for sale to [...]
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