Which Came First, the Supply or the Demand? -- Mike Einstein

First, the bad news: A quick study of the traffic numbers for Alexa’s Top 500 Global websites reveals that we have been buying and selling the wrong clicks all along. Now, the good news: The solution, like the problem, is staring us right in the face! (Doubters and non-believers may now return to chasing digital string.)

Not surprisingly, the Alexa rankings are dominated by ad-supported publishers and content providers. But precious few brand advertisers make the list. In fact, the highest-ranking traditional brand advertiser – Walmart – doesn’t even crack the top 100 (#144). So, despite the fact that all of these mega sites are ad-supported, they don’t appear to be working very well for their supporters. And as long as we continue to beat the dead-horse legacy-publishing model and clutter the world with ads that no one outside our industry wants anything to do with, the picture isn’t likely to change. Affordable, scalable audience reach will remain MIA, and niche publishers will continue their inexorable march to the exits. What’s called for is a radical departure from the moribund advertising-as-intermediary culture that perpetuates this insanity.

The path to enlightenment begins with a wholesale rethinking of the dynamics of supply and demand. It isn’t a matter of which came first, because in digital media the ad supply is completely subordinate to the consumer demand for content. Stated another way, a page-view is the pure causal effect of a conscious content selection -- to wit, it doesn’t even exist until a measurable consumer choice triggers its creation. The bottom line: We need to focus on the consumer behavior that we know for certain already exists, manifest in the literally billions of page-views generated online every day by choice.

To best leverage this behavior, publishers must let go of the misguided notion that there is any advantage in curating content and/or traffic. We need look no farther than TV, the easy-to-buy reach devil we know, to see the wisdom in turning things over to the folks picking up the tab – the advertisers. Think about it…whereas television networks willingly cede total control of their signals and identities to paying advertisers during commercial breaks, online publishers insist on curating both their content and traffic. I can give you five reasons why this makes no business sense whatsoever:

1) In the commercial-media business model, a publisher’s (indeed, the media’s) only job is to generate audience for its paying customers, the advertisers.

2) Many page-views emanate from search-derived content choices. As such, there is no publisher-specific point of origin in the selection process, which means the audience has no expectations of or allegiance to the environment in which the chosen content will appear.

3) Research shows that people simply don’t care where they consume the content of their choice, provided they can do so without interruption. It’s the interruption that they won’t tolerate.

4) If the prevailing online ad model were performing as designed and intended, publishers would be losing traffic to ad click-throughs all day long. But given industry-average CTRs of less than .1% (statistical zero), the only thing that recommends the current model to publishers as an effective traffic-control tool is the fact that it doesn’t work for advertisers – which means it ultimately doesn’t and can’t work for publishers, either.

5) There is no need to curate/control an audience that is there by choice. They already want (demand) what the publisher has to offer – that’s why they chose that particular content in the first place.

As my brother and business partner, Jeff, postulated in his Advertising as DestinationKeynote Address to the Econsultancy Peer Summit Chicago a couple of years ago, by merely shifting our perception and positioning of content instead of ad space as the media currency of true value, it suddenly becomes possible to convert each and every content click-through into an exclusive branding opportunity for the right advertiser. For example, let’s say I’m searching for information about a new car and I click on an article from one of the leading automotive information publishers. Instead of that click terminating on the publisher’s site where – like everywhere these days – the growing clutter has made it near impossible for any brand message to break through, doesn’t it make more sense to redirect both me and the article to a paying advertiser’s site (i.e. Chevrolet) where I can enjoy my content choice without clutter or interruption?

I gotta believe that most brand advertisers would prefer the role of gracious host over unwanted intruder. Best of all, each and every publisher content link can be monetized this way; thereby injecting new life into the beleaguered publisher ranks and restoring effective, scalable audience reach to the branding equation.

Hypothetical case in point: Yahoo generates 80 billion page-views per month. That’s almost 3 billion (virtual reach by any measure) demand-driven content selections taking place each and every day! But according to Trefis, Yahoo’s RPM page-views is less than $1.50! That’s a whopping fifteen hundredths of a penny per page-view. What if Yahoo applied the advertising-as-destination model described here to just 25% of its page-views and charged advertisers only five cents per click-through (about 5% of prevailing average CPCs, yet 33x Yahoo’s current yields) to host both content and consumer? My calculator tells me that 20 billion content click-throughs at only five cents each = $1B/month – from only 25% of Yahoo’s proven audience assets (page-views)!

On a more organic level, the transition from advertising-as-intermediary to advertising-as-destination is the only way niche publishers and serious content providers can survive a CPM pissing contest with the likes of Facebook, Twitter, et al. And it’s the only way to achieve scalable audience reach – measured in actual self-qualified visitors, not just empty impressions – in a media world that now boasts more means, motives and opportunities for consumers to avoid ads than there are consumers to avoid them!

In a tepid defense of the status quo, skeptics will cite the prowess of Big Data and predictive targeting technologies. But logic, common sense and history dictate that the best way to target prospects is by allowing them to self-declare their intentions and attentions by virtue of their content choices. It works for TV and it can work online as well – in scale – if we just leave consumers to their own devices.

Mike Einstein presently comprises one half of the Brothers Einstein, a very small, very contrarian digital brand strategy boutique.

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