Guest Blogger Chas Edwards of Federated Media
Smarter minds than mine (BuzzMachine's Jeff Jarvis on frictionless "open ad marketplaces," and Google's Eric Schmidt on his preference for targeted ad bots over targeted ad salespeople) have argued that algorithms and auctions will create market efficiency for advertisers and publishers, and with market efficiency, a kind of "perfect" ad pricing that recognizes value more intelligently. Especially for small, quality independent publications that are left out on the ad-budget sidelines today because they don't have the resources to take media buyers out to expensive restaurants, perfect pricing will mean increased revenues.
Well, when I think back to the woman who let GoldenPalace.com, for $10,000, tattoo its URL in one-inch letters just a scull's thickness away from her mind, I have to wonder. She used eBay to sell the sponsored tattoo on her forehead. By my math, she gave away the space for an effective CPM around $11.42. As I wrote on my site last summer: As efficient a marketplace as eBay is, I wonder if she might have done better hiring a freelance ad-sales rep with two-plus years of sales experience. Someone who could add a little sizzle to the pitch — y’know, to get some of that “irrational” premium that keeps media companies in business.
Many brand marketers would argue that the premiums they pay for human service or the even larger premiums they pay for that human service when it's backed by a large media company they trust is entirely rational. Not rational in a purely mathematical way, in the sort of calculation a direct marketing professional would do. But rational because there's a human rep committed to the campaign's success, someone who doesn't collect his or her commission check if the ads run adjacent to inappropriate content (by that advertiser's definition) and the advertiser refuses to pay the bill. A human that can make sense of that advertiser's -- perhaps irrational -- definition of "inappropriate content." It's a premium they pay for safety and trust.
I agree that the small, quality independent publisher is getting short-changed in today's marketplace. But I don't think the solution is an AdSense-style or eBay-style silent auction platform for prospective ad buyers. Humans are still better at building trust and ensuring safety for brand marketers -- and at demanding a premium that corresponds with the publication's quality. What we need to figure out is: How do independent sites band together (or "federate," as we say at FM) in such a way that they can provide scale and reach to marketers without losing the individual brand identity with which marketers want to associate?
I don't know Chas...I think we can put all our trust in machines...who needs people?:
Unfortunate product placement. Image via Streetsblog, posted by Aaron Naparstek