AOP Summit 2011: Publishers behind Ikea in digital stakes

Publishers should monitor their online ad inventory as closely as Ikea monitors the amount of couches in its warehouses, Jakob Nielsen, GroupM's managing director for interaction, told the AOP Digital Publishing Summit today.

Jakob Nielsen: GroupM managing director for interaction
Jakob Nielsen: GroupM managing director for interaction

Nielsen said: "Publishers need to really understand the value of their inventory much more than they do today. Ikea, for example, knows exactly how many couches they have in warehouses all over the world. They have people just looking at that.

"Publishers need to do exactly the same or they won’t be able to negotiate with agencies the same. If you know the value [of your online inventory], you can bring up the price."

A lot of online inventory is currently sold through ad networks, but Nielsen said that GroupM was looking to reduce the number of ad networks it traded with, from 47 to around half that number, by the end of this year.

Nielsen joined Anthony Rhind, the co-chief executive of Havas Digital; Dale Gall, the UK chief executive of Profero, and Pete Robins, co-founder of agenda21, in a debate on the evolution of trading between media agencies and publishers.

The discussion ranged through real-time bidding, demand-side platforms, exchanges and how publishers could optimise the yield from their ad inventory.

Ultimately, while the agencies offered some comfort to publishers who were prepared to invest in technology, had premium inventory and quality data on their readers, there was still the clear issue that while supply massively outstrips demand, CPMs will be difficult to drive up.

Rhind said media agencies did value digital ads, but "oversupply" of inventory was a problem for publishers.

He said: "Look at average CPM per media – digital is at zero. It doesn't mean that’s the quality, it means that’s the market price."

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