Something’s Got To Give

The transactional part of our business is about to undergo some significant change, in my opinion.  I’m not talking about the brand-oriented, placement-centric portion of digital display.  I’m talking about the action-oriented piece that is mostly focused on delivering Cost Per Whatevers at a manageable price.

There’s a big movement underway for brand protection, and more than a half dozen companies are credibly in the space with reasonably useful tools.  I’m predicting that this movement will be successful and that new technologies will fall into widespread use, blowing the lid off of transactional buys.  When this happens, advertisers are going to realize they’ve been advertising in places that they never expected to, and have been doing so for quite some time.  This will lead to an attempt to more accurately control placement for transactional buys.  As you might know, advertisers can exercise control over environment or pricing, but can’t drive both down simultaneously.

Many advertisers will have an additional “A ha!” moment.  They’ll see that the small slice of network inventory (10% or less) that passes for “premium” plays a key role in the success of their campaigns, while the rest is largely backfill.  The most obvious result of this realization will be increased demand for premium inventory, driving prices up for the top ad inventory on quality sites.

Much of this inventory overlaps with the inventory most interesting to brand advertisers, who look to impact brand attributes with their advertising instead of driving direct sales or clicks.  Increased demand will mean higher prices for premium inventory and drops in value for junk inventory, widening the chasm between what’s valuable and what’s not.

So, to the extent that the brand protection technologies become standard throughout the industry, we’ll likely see widespread changes in pricing dynamic.  When control is exercised over environment, something has to give.  That something is pricing.