Study: Advertisers Will Buy Into Premium Inventory

Publishers are missing the opportunity to sell advertisers on high-margin “premium” inventory, according to research firm Jupiter Media Metrix.

According to analysts at the New York-based company, more than 64 percent of online advertising buyers will pay more money for placements they perceive as premium — high-visibility, large-size, and often exclusive.

The idea is that because of its greater size and central placement, creative run in premium ad space is more likely to woo consumers. That’s the theory behind recent pushes like those of the Interactive Advertising Bureau, which earlier this year rolled out a series of new ad sizes. Since then, the industry association has been promoting the larger sizes — and rich media creative to go in them — as compelling ways for advertisers to shape their brand with consumers.

At any rate, the study concludes that while publishers are struggling to sell most of their ad space, they can maximize their income by turning some of their inventory into higher-cost premium spots.

“Web publishers are struggling to sell their surplus of available inventory and are looking for new opportunities for developing premium inventory,” said Patrick Keane, vice president and senior analyst at Jupiter Media Metrix. “New creative formats, performance pricing and greater accountability will not turn the market around any time soon. Publishers should focus on selling the 30 percent of their inventory they can sell at a premium.”

But Keane said most publishers are wrangling with exactly how to define and package premium inventory. What they ought to do, according to the study, is further squeeze revenue out of their sellable ad space by offering advertisers better branding opportunities — which most often translates into rich media creative — and enhanced targeting.

Indeed, a combination of premium reach, branding and targeting will command the greatest return from advertisers, according to the report. Of surveyed media buyers, 47 percent said they had expectations of higher ROI when utilizing premium positions, while 27 percent sought exposure to a more targeted audience through premium offerings.

“Publishers that ‘supersize’ and combine premium reach, premium branding and premium targeting will be able to exact significant premiums,” Keane said. “However, sellers can’t ignore standard inventory in favor of only selling premium inventory. Publishers need to follow the lead of companies who have successfully developed self-serve solutions for hard-to-move standard and performance-based media.”

But data from AdRelevance, Jupiter Media Metrix’ online ad tracking service, indicate that nearly 50 percent of sites support six or more creative ad units — diluting publishers’ inventory.

In addition to stemming the amount of available ad spaces and ad-supported pages, publishers can remedy the situation by monetizing at least some of that less-attractive inventory through a self-serve, auction-style system. Similar to how the pay-for-placement search engines sell keywords, such a system would move low-cost space with little effort from sales teams, while raking in additional revenue.

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