Jeff Jarvis: More on the Open Ad Marketplace

Here is Jeff’s reply to my note (thanks, Jeff!):

Chas,

I may be expressing this badly… and I certainly may be naive… but I do believe that such a system could instead improve the value and revenue for highly targeted and high-quality blogs and other media.

I think you are right when it comes to plain CPM and CPC advertising that can appear anywhere: Advertisers like Pay My Bills and Vonage, for example, tend to buy tonnage and judge those purchases soley on performance, right?

Up the food chain from that are branding advertisers who do want to appear on quality sites that are relevant. But I’ve heard from agencies that they find it difficult — impossible, actually — to put together a critical mass of audience that makes it worthwhile to make the buy in our medium as opposed to other media. The open system I’m proposing would make it easier for them to both find the right sites and get the apples-to-apples measurement they require.

At the top of the pyramid are highly targeted sites and here I believe the marketplace adds the greatest value because it allows advertisers to find the “perfect” sites for them and pay for them. They will pay for perfect and, at the same time, will find more efficiency because they found the ideal environments.

How does this affect networks? Well, again, I may be naive and you can tell me far better but I think that this allows networks to be more flexible and to provide one-stop-shopping to agencies: When you sell an advertiser on a specific flight and need to get more “perfect” inventory, you can do so — but not be responsible for those added sites all the time. On the other end of things, if you have excess inventory (God forbid!), you can put it out in the marketplace.

This is not entirely a frictionless, rational, performance-based system — though it is, that, too. Instead, this is an infranstructure for advertisers for higher value advertising and for advertisers to find the critical mass and metrics they demand in trusted, quality, endemic, targeted, and sometimes ad hoc networks of sites.

Or so I hope.

My original post.

  1. # BuzzMachine » Blog Archive » Open ad marketplace, continued said: April 20th, 2006 at 7:14 am

    [...] Pat McCarthy replies to Chas Edwards’ questions about value in an open ad marketplace: Just because an open ad marketplace is “frictionless”, doesn’t mean these same advertisers couldn’t find these same high quality publishers and advertise on their inventory. The value of an auction is that it bids the value of inventory up. If Fred Wilson’s blog advertising was available in an open marketplace, he could still get a premium for his inventory, and only accept advertisers he wanted to work with. [...]

  2. # The Role for Humans In Digital Marketing at ChasNote said: February 9th, 2007 at 11:55 am

    [...] “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.” [...]

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