AdBrite’s PPC Model Eliminates “Premium” Inventory
[Posted by Shar VanBoskirk]
Just before the Christmas holiday, I spoke to Iggy Fanlo, CEO of AdBrite — an ad network specializing in helping advertisers access niche content. A few constant signatures of AdBrite:
1) It aggregates volumes of niche and user-generated content. It has 114 million impressions daily across thousands of sites including some branded publishers (Boston.com, ellegirl.com, eBay) as well as a lot of blogs, images, trade pubs.
2) It functions as a marketplace. Advertisers set a bid for the type of impression they want, AdBrite finds the highest yielding ad that matches the parameters of an advertiser’s bid and charges the advertiser one penny more than the highest current bid.
3) Advertisers have transparency into where their ads run. Advertisers can either select certain publishers at the time of the buy, or they can set up their buy and then de-select any publishers whom they don’t want to advertise with.
4) It is self service. Any advertiser, regardless of size can set up a buy through adbrite.com
On top of these fundamentals, AdBrite is trialing a new pay-for-performance option where advertisers pay only when their ad generates a desired return (clicks, sales, conversions). PPC is not new, so I suppose you are asking what is different about AdBrite’s new model. Well, think about paying for performance that is optimized algorithmically and rolls all targeting factors (like demographics, context, behavior) into a single effor to optimize click through. The short take away here is that with this approach, you stop worrying about what magic combination of targeting will generate the greatest response, and you let the algorithm find that combination for you.
In my mind this does two primary things for advertising: 1) It normalizes all inventory against one factor: performance. Today, "premium" publishers charge rate card prices based on the reach and composition of their audience. But what if that audience doesn’t actually convert as well as audiences on a less premier site? Then premium inventory is actually not worth its asking price; 2) It introduces competition for Google AdSense. AdBrite’s system does the same thing AdSense has been doing for years. Now advertisers have some flexibility: more places to try to convert their audience, more ad formats, and access to PPC on larger sites than typical AdSense publishers; 3) Lastly I think this hastens the need for publishers to become audience-aggregators, not content creators. Sites that serve advertisers highly converting audiences will end up being more successful than those winning the Pulitzer.