Publishers Leaving Billions on the Table: Rubicon
Online publishers are losing billions of dollars as a result “secondary premium inventory” that is being undervalued and undersold, according to a recent report by the Rubicon Project.
Launched in in 2007, the Rubicon Project aims to help advertisers and publishers profit from unsold ad inventory by using its SmartMatch technology to serve relevant ads into what would otherwise be unsold space.
“Premium inventory is sold directly; non-premium inventory is bundled, infused with more value, and then sold by the ad networks, but there’s a whole class in the middle that’s currently being undervalued and undersold,” said the company’s recent report. “It’s called secondary premium inventory, and research suggests that it could be worth billions of dollars in incremental revenue to publishers.”
Most publishers think about their advertising as either premium or remnant and, as a result, have commoditized a significant and valuable proportion of their inventory, the Rubicon Project report said.
“The notion of remnant inventory is horrible and ridiculous,” said Jim Spanfeller, president and CEO of Forbes.com, according to Rubicon. “Every interaction on a browser is the same fundamentally. Just because we haven’t sold it doesn’t mean it’s less valuable.”
For example, Rubicon’s report said, if a Miami-based travel company wanted to reach women 18 to 24 years old who are interested in nightclubs and fashion, it could bypass Cosmopolitan’s 20/CPM home page being pitched by the publisher’s sales team and buy $1.50/CPM remnant space on Cosmopolitan from an ad network.
“But what if the network’s ‘remnant’ Cosmopolitan inventory was worth more than $1.50/CPM?” the report said. “What if the units were behaviorally targeted and reached visitors reading Cosmopolitan’s ‘Get a Great South Beach Body’ article right after they’d come from checking out vacation packages on Expedia.com? Wouldn’t those impressions be just as valuable—if not more so—than the $20/CPM homepage ad?”
Rubicon contends that “secondary premium” advertising is only slightly less valuable than premium and that publishers need to shift their thinking from just two types of inventory to three.
The reason: Percentagewise, non-premium display advertising is expected to be the highest growth category in online media, the report said.
Rubicon contends that by not getting the most value out of secondary premium space, U.S. publishers alone are leaving $6.5 billion on the table a year.
