I just read a great piece by Michael Zimbalist of the New York Times Company on paidcontent .org. He clearly has a deep and precise understanding of the substantive issues at play in the channel conflict debate. The more other major publishers and the market at large understand the distinctions he’s helping to clarify here, the better off we’ll all be. We’ve certainly done our part to help clarify terminology and to help publishers prevent channel conflict, so it’s great to see smart publishers joining that effort.
Standards are an extremely important issue, but I think Tillinghast really has it wrong in this article which ran in the New York Times this week.
First of all, his quote: “We made it possible for any Web site to run ads through the ad networks. That’s created an oversupply of space.”, doesn’t make sense. How does enabling different distribution channels create oversupply of product? It’s all the same inventory after all – the only difference is whether or not the sale is through an intermediary. Regardless, deliberately creating “complicated”, “unusual” formats is exactly the wrong answer. The reason for the “soft middle” as he puts it is an inefficient, manual buying process for anything but DR-focused advertising. Since DR only accounts for ~1/3 of measured media spend, these operational barriers have created the imbalance of supply and demand that is responsible for declining yields and accompanying publisher hand-wringing. Tillinghast’s prescription – every publisher should make their own unique ad units to deliberately make the buying process less efficient – will make all of this worse, not better. Picture TV with only product placements (no 30-spots) and no networks (national buy takes 100 phone calls and associated logistics). That’s an obvious disaster for advertisers and content providers alike.
The answer is more standardization, not less. The author is correct to be skeptical.