Oversupply

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There is a lot of interesting debate happening across the industry right now. From a display advertising perspective, the notion of programmatic, RTB and viewability are leading the day. Two interesting articles hit the trades last week:

-Jeremy Hlavacek of Varick Media Management breaks down the math behind display in Adweek

It all centers around one issue: a massive oversupply of display inventory, much of it low quality in placement. Relatively simple, but with significant implications:
– The supply/demand imbalance puts pressure on CPMs, putting digital publishers—who are responsible for the content creation that traditionally drives brand advertising spend—in a challenging spot.
– The low quality placements—particularly those that are below the fold and never in view and thus do not drive much in the way of results, but are in abundance across exchanges—make brand advertisers hesitant to put more dollars to work.

The solution to the problem is, again, simple, but requires significant investment and work by all involved:

– Prioritize viewability to reward good publishers and give advertisers confidence.
– Reduce the amount of ads across pages—à la the new USAToday.com.
– Invest in larger, engaging formats like the IAB Rising Stars.


We actually started the year talking about this issue. Here’s to making real progress in 2013.

Eric Franchi

Eric Franchi is co-founder of Undertone and serves as senior vice president of business development, leading the company’s relationships with its most important partners. A respected industry leader, Eric has been featured in publications including Ad Age, Adweek and The Wall Street Journal, and on stages worldwide including IAB MIXX, Advertising Week and Cannes. He has held a place on the board of the Interactive Advertising Bureau (IAB) for several years, helping guide the digital advertising industry through a period of rapid growth and change.

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