The Metamorphosis of “Premium”

(originally published on MediaPost)

“Premium inventory” is one of those squishy industry terms that mutates every time you poke at it. Most people can at least agree on this much: A premium “thing” is usually of a higher quality and cost than the other “things” available in that category — e.g. a Rolex is premium compared to a Swatch, and a BMW 7 Series is premium compared to the 1975 Pontiac Catalina I drove in grad school. The Ritz-Carlton is premium, Motel 6 is not.

The problems begin when you add the word “inventory.” First, when we’re talking about content (where most inventory lives), whether or not something is “premium” is often in the eye of the beholder. I find the Friskies / Buzzfeed “Dear Kitten” videos endlessly hilarious, and I would call the experience of watching (and sharing) them premium, but my opera-adoring aunt might disagree.

Second, as smart people have pointed out before me, the concept of “premium inventory” is a manufactured designation that sellers created to help justify higher prices. That trick really only works when there is a shortage of supply: digital video before YouTube, say, or journalism before blogging.

Third, and perhaps most significant, the term is a vestige of an earlier era, one where “publisher” was synonymous with “audience” and not simply a proxy for it.

When new things look like old things, we are all prone to applying old mental models to describe them. Thus we compare digital video to TV, podcasts to radio, mobile gaming to console gaming, and try to figure out which is more premium than the other.

But what if, zooming out to the widest possible angle, we are actually looking at something new? What happens when a guy named Copernicus comes along and tells you the sun, not the earth, is the center of the universe? How does daily life change after that?

As we go from 1.5 billion PCs to 4 billion iOS and Android devices, and a TV becomes just another piece of glass, we have to acknowledge that the basic physics of the media market have changed — particularly with regard to scarcity, time and substitutes.

The story of media over the last 50 years is one of technology driving decreases in (inventory) scarcity and increases in (audience) fragmentation. Back in the ’70s, a TV watcher had a whopping 12 channels to choose from (which was still better than staring at the radio), then cable came along with its hundreds of channels, Web video with its thousands, millions…

If you draw this as a graph from 1960 to now, with “years” on the x axis and “content supply” on the y axis, the growth curve would appear as linear for the first several decades, before turning into a hockey stick and becoming exponential after the 90s. After 2005, you’d need to switch to a logarithmic scale to make sense of the numbers.

And these are just the media choices. Add to this the increasing number of non-media choices — what an economist would call substitute goods — now competing for our attention. Mobile messaging and mobile gaming, for example, command huge amounts of user attention, yet “inventory” has virtually no presence in either.

Ironically, the only scarce commodity in all of this is time. Not even the most vigorous multi-tasker can alter the fact that there are only 24 hours in a day.

In a sea of endless choices, devices, and distractions, a brand that puts consumer experience at the center of its worldview will navigate even advertising-hostile environments with grace.

Because here’s another thing has always been true: great advertising doesn’t feel like advertising. It feels real, authentic. We actually like it! The great creatives have always known this, but as screens have gotten smaller and smarter, creating such experiences has become as much a matter of technology as design.

One compelling example is Verizon’s recent Minecraft integration, a savvy evolution of the branded-content genre. Verizon built a functioning cell network and web browser (as an open-source mod) within the actual Minecraft game, such that a player can watch YouTube videos or call their friends from inside the game world.

It’s advertising, it’s cool, and yes, it’s premium.