Today I had this sudden sensation that many of my posts tend to be about how things are a little harder than people expect them to be.
Today’s “actually, this problem is pretty hard” is based on an article in Advertising Age about Portfolio.com. Portfolio.com is planning to extend the reach of their web site by buying exchange inventory, allowing them to sell more of their audience in the face of sold out inventory.
Advertising.com has been selling this off and on for years under the name “Audience Extend”. Theoretically, this is an extremely powerful product for an oversold publisher because it gives them access to the exact same audience on relatively inexpensive inventory. This can be valuable to an advertiser that is trying to reach this audience and valuable to a publisher eager to continue to take revenue.
I have always found that these deals are extremely challenging to make work because in a situation like this, the salesforce of the publisher (in this case Portfolio.com) is used to representing a premium inventory placement (it is sold out!). Once you start working to educate the sales force about how to sell in a network model (sometimes blind placements, uneven, usually non-guaranteed distribution of advertising across placements, etc.), you are taking your sales force out of your sweet spot and asking them to do something different. Furthermore, usually you need to find someone on the network side who is experience at the network model sales approach and involve them in either training or directly supporting the sales cycle. Obviously, this is not a job you can ask your worst salesperson to do.
Given the margin compression that results from the network sharing revenue with the selling publisher, plus the cost of inventory, it can be hard to justify on the network side investing appropriately in the partnership. In the same vein, when the network offers to put forth substantial resources, the publisher sometimes becomes concerned that the sales force may take their eye off the ball with the constant barrage of network rhetoric.
Managing partnerships is a delicate challenge that necessitates both parties investing significantly upfront to maximize the likelihood of success. It will be interesting to see if Adsdaq and Portfolio.com make this work in any context outside of a one-off deal opportunity.