We often hear that performance networks devalue publishers inventory. So is ‘performance’ inherently wrong?
To answer this we need to examine the problem in more detail to find its roots. When people point at performance as the root of all evil what they are really concerned about is;
- The payout (eCPM) is too low
- The content is too expensive to produce
- No one wants to pay for the content
So there is nothing inherently wrong with performance, its just that the initial popularity of CPM has supported online business models and common approaches that are just fundamentally flawed. There is certainly going to be some radical changes in the way businesses approach the internet over the coming years as a lot of ill-conceived models will finally fall over to be replaced by “internet friendly” business models. Google, Facebook, Ebay and Amazon have all demonstrated that there is certainly money to be made online once you figure out a revenue model that is not based on a shotgun one-way broadcast.
We can all understand why marketers were so keen to buy and sell online ads by the week or CPM using the “audience skew” to select individual placements. Its exactly what they had been doing for years with print, radio and TV. But what they failed to accept is that online is not just another mono directional broadcast channel. The way online interacts and reacts to its audience and the level of live feedback available fundamentally changes the way you market, build brands and sell products.
Online Value Chain
