“Ad Inventory” Will Soon Be No More

This anachronism will soon disappear. Not sure what replaces it.

Modern website advertising still leans heavily on the notion of a fixed set of spaces where advertising will usually appear. This is known as “ad inventory”. Even though the web has the potential to be dynamic, it’s remained a remarkably reliable concept. Some sites stick ads to the top or bottom of mobile webpages, follow along as you read, or do other somewhat-dynamic things, but even these are fairly consistently used from viewer to viewer and don’t take into account how much time or interest the viewer may have in commercial messages right then.

The inventory concept no longer makes sense because by definition it doesn’t take into account the person on the other end of the screen. It’s a shelf-centric view of the world, instead of a person-centric one. I’m running to catch a train 30 seconds from now and want my article to download, not the ads on that page (ads which I can’t take action on since there’s no internet on the train). [BTW let’s not kid ourselves that desktop usage matters anymore — mobile is pretty much all that counts] Not all users reading content are in the same ‘mode’, so using the amount of time they spend on a site as a way to understand their value as an advertising user (as some industry folk have suggested) is also dubious.

In online media, cheap is often expensive. Many advertising agencies simply want to get a large number of “impressions” run so they can tell their client (say) they reached 10 million people at an average cost per thousand of $2. When in fact, half of those “people” might actually be bits of software auto-loading pages. The cash register didn’t ring for the client but hey, it was so darn cheap!

All that matters is whether someone who saw that ad bought the advertiser’s product. Period. We can and should argue about how many ads they had to see, which had what effect, or if they were going to buy anyway, but there’s a problematic mindset of having to spend a bunch of ad money with nothing more than a vague confidence that it’s buying access to the right kind of people.

Advertising and subscriptions fund the creation of news and informational content by journalistic organizations and to a lesser extent, some individuals. As I’ve written, interruption is not going to work as a tactic for the new media to get paid as it has for the old. I’m also not sure that most news organizations (that aren’t the local town newspaper, where at least you know I’m probably a local) actually have any useful data to bring to the table.

We need to fund journalism. I don’t know yet how we’ll ultimately do that, but I am confident that it is NOT through interrupting someone reading the news in a cookie-cutter all-readers-are-equal way. I have some ideas, as have many of you which I’d love to hear (DM me on Twitter). We’re building things on optimal.com, to experiment and see which new things might be promising approaches.