Why “yield” should matter to us
Eric Picard, director of advertising strategy and emerging media planning at Microsoft Digital Advertising Solutions, offers an important essay for television today in ClickZ. “How TV Is Killing Itself by Accident” takes issue with ABC’s decision to sell advertising at flat rates instead of the CPM model. His main issue is that television doesn’t understand the concept of “yield” as it relates to the internet.
Online publishers implicitly understand yield. In a world where the audience decides what and when to consume, all a publisher can control is the way it distributes advertising across that content. A smart publisher places ads into content by always running the ad that gives the publisher the highest return. Inventory efficiency — the amount of ROI for the publisher (not the advertiser) — is the yield. The more efficient the publisher is at placing its highest return ads in the ad calls, the more money it makes.
But what is fascinating about this to me is the gap that exists between stations and the basic fundamentals of reach/frequency advertising on the web. This is due, at least in part, to reliance upon closed networks of television station websites, businesses that understand this but don’t necessarily share it with the network itself. If your inventory belongs to and is managed by somebody else, there’s no incentive to learn all this stuff.
This is why I advocate local stations doing this for themselves and forming their own alliances — within the communities they serve — to achieve scale. And this is especially critical in the Media 2.0 world, where a single, monolithic Website is the EZ Pass lane to the tar pits.
