Today's participant is Tolman Geffs, Co-President of Jordan, Edmiston Group, which provides investment banking services in the media and information industries. He recently answered the following question during a conversation with AdExchanger.com...
AdExchanger.com: From the Internet Advertising Bureau annual meeting over a year ago, you offered a slide which showed all the slices being taken from the marketing dollar before it ever gets to the publisher. How are the “slices” in the marketing dollar evolving today?
TG: I think right now the chain is even more fragmented. Pricing is even more opaque - particularly with the separation between data and inventory and a more robust market for both. The $1-to-$5 spread can be even wider now than a year ago.
Simply put, publishers are willing to sell “remnant” inventory for a $1 or similarly low CPM. To often, “remnant” means “what our sales team did not know how to sell” rather than “audience that no marketers value”. Ad networks and other intermediaries are able to associate those impressions with desirable audiences using user data and tracking cookies, delivering those to advertisers who are willing to pay something on the order of $5 or more for that user. While difficult to broadly measure, our view is that this spread has if anything been widening – publisher pricing for second tier inventory remains soft while the ability of intermediaries and agency trading desks to package desirable audiences based on user data has been accelerating very rapidly.