I don’t know Neil, and he is probably a good guy, but I have to say it: Do you really want a guy this terrible at math doing your media planning? Neil’s concept might even be right, but he illustrates it so poorly I lose faith.
In a recent article on MediaPost, Neil posits:
It is much better to get $5 CPM for 80% of your inventory than $20 CPM for 20% of your inventory. Sure you may feel some pride telling your peers that your site CPM is $20 … but when you sell only 20% of your inventory, you are not only decreasing your revenue potential, but also undermining your advertising relationships — the kind that develop into profitable repeat business.
Is $5 for 80% of your inventory really better? Let’s do some quick math (He posits $1/cpm as a typical remnant price earlier in the article):
- ($5 * 80%) + ($1 * 20%) = $21.00
- ($20 * 20%) + ($1 * 80%) = $24.00
5 * 80% = 20 * 20%. That is 1st grade math and revenue neutral, plus you have way more inventory left over to try to come up with schemes to do things with.
Hysterical that no one notices this.