Fairfax slashes digital advertising rates

Just to clarify – CPM is cost-per-thousand ad impressions or ad impacts. Not cost -per-reach of a thousand visitors.

could be a bad case of disco limbo.

once you go so low, you can’t come back up.

Good point, Greenleese – badly expressed above. Ta for flagging that up. (Now fixed)

Cheers,

Tim – Mumbrella

If they want to be keen competitors in the market for a RON (run of network), they’d be wanting to slash their CPM’s a little more… I’m sure you can squeeze a publisher or performance network to less than $2.50 for a $5,000 commitment?

I understand the concepts of supply and demand. And right now in the market there is an over supply of inventory and not much demand. I’m also the person that is constantly reminding our publishers that we can’t stand back and just say ‘we’re premium, we deserve more’. You have to create demand, not just demand it.

That said, what Fairfax is doing is going to potentially impact the entire industry and for a long period of time.

Worse case scenario = the other ‘big four’ follow suit and drop their pants as low and then the flow on effect into the wider industry means that pricing just gets lower and the value of online declines further (after years of trying to get it seen as more valuable). Publishers start moaning that the agencies are demanding ludicrous prices, but the reality was that the publishers started the dangerous game in the first place.

Best case scenario = everyone else accepts that Fairfax has to do this because their a) desperate and b) quite frankly their sites are rubbish so it’s hardly surprising that no one wants to advertise on them. Ninemsn, Yahoo!7, take note – your sites are actually better and you are worth more than that. Agencies aren’t going to put all their eggs in that basket, advertisers will want to see more than just Fairfax on their schedules. You don’t have to play the game.

JD, as for your comments on CPM’s being lower on performance networks and whilst I know that you’re firmly placing your tongue in cheek (geez, ‘squeeze a publisher’ you’re clearly on the agency side) – basically that is what Fairfax is likening it’s site to. Rubbish sites with rubbish inventory, just like performance inventory.

Agree with Jenene. When you start competing on price like this it is slippery slope – very hard to get it back up. But many publishers have been selling like this since the first ad space sold in US 10 yeras ago – they were deparate for revenue so started as price taker and have not changed since then.
As an industry we need to demonstrate fair value of what we can deliver. To get that value you need to have better targteing, communicate the real nature of the community being reached,and offer innovative and more effective creative formats that better engage communities on line. Stop treating impressions as commodity – they are not pork bellies, thay are people. Yes this is harder than resisting a price cut, but will be worth it in the long term. Also better understand supply and demand – create scarcity and increase value. Don’t drop price and create more impressions to try and compensate. that is lose, lose. Amen.

Lets be realistic here. Fairfax wouldn’t need to ‘go public’ with this kind of message if they actually gave their sales staff the ability to be flexible on rate every other day of the week.

Let’s remember this happens EVERY single Q2 of every single year in every single media as they scramble to bring in revenue as the fin year ends …

Yes, this is probably more public and broadcast than most but still the moment when “pricing just gets lower and the value of online declines further” happened years ago.

There’s an economic argument for CPMs to drop anyway – compared to o/s and many other media they’re high in many instances … not to mention the amount of supply in the market.

When is someone going to respect the cost of content?

Hey I get it – supply and demand.

BUT there is never going to be a demand driven online advertisng business with the internet doubling in size every six months and the inventory is approximately followign suit. Meanwhile back at the ranch, the advertisers are halving.

So, if marketers really care about their brands they will start to engage in this conversation as the end game is poor content which is bad for your brand – your medium to reach consumers becomes as useful as the popes member.

To continually attempt to ‘squeeze’ a publisher is useful for this month, but will only result in a diminished medium with worse and worse results.

Bring on the outrage. . .

I’m with Quentin on the importance of good, fresh content. Gruen hit upon that last night in discussion on McDonalds’ dynamic TV advertising.

I wonder if Google’s “Stimulus Package”, giving $75 of free ad search, is having any impact on demand for Fairfax advertising? I think Yahoo also jumped on Google’s bandwagon…

Do any media publishers sell on a ‘unique impressions’ basis? Capping frequency and buying an actual audience as opposed to reaching some people many, many times?

eg. I want to buy all the Business audience with a freq. of 3 over a period of x, I’ll pay you per y people delivered over that time.

Any thoughts on this (admittedly brief) idea?

Yep we advise and deliver clients a maximum of 6 unique impressions per day based

Al the research indicates you are wasting your cash after that and yes we get a premium for it.

Any client who’s media buyer is not getting that should ask themselves a few hard quesitons. Its basic.

The video introduction to Fairfax’s “Stimulus Package” is one joke milked until the cow’s teets are blistered with unfunniness.

Would it kill them to run a deinterlace? They went to all that trouble to grade it like old TV footage, seems like the first thing to do…

Alledgedly, ninemsn are now out to market offering planner/buyers $250 Myer vouchers for every $20K booked into June and for every $50K booked into Travel they will receive a trip for 2 to Hayman Island…it ain’t just Fairfax Dorothy

“Yep we advise and deliver clients a maximum of 6 unique impressions per day based ”

At that rate an ad could get a frequency of 42 for a week – how efficient …

I can understand discounting banners and inventory that’s unsold at the end of fin year, but what surprised me about this is they are blatantly price slashing those intrusive homepage takeovers.

Those executions significantly compromise the user experience, so much so that many people in my social circle are switching to the ABC for their news as a result of being bombarded by Listerine ads and alike on smh.

These executions should be held as the jewel in the crown, only sold at a super premium and used sparingly for relevant and interesting creative. Once you start flogging them on the cheap you are saying that you no longer care about your audience. They are secondary to the advertiser. I would expect that from the Daily Tele but not from the smh.

James, we offer frequency capping as standard with every campaign at no extra cost. (completely agree with you Ben). As for the number, it depends on the brand – some female product brands need more eyeballs (if you’re measuring by click), and depends on the offer (we will measure it daily and make changes as its going to make sure it performs against category benchmarks). We also offer exclusive ad on page and geo targeting – which I am shocked is not standardised / expected from every publisher.

As for ninemsn allegedly giving away bribes for advertising, good luck to them on that one – most corporates have a rule internally about not being allowed to take them. How about instead of empty bribes to buy crap space – we all pledge to have an offering that includes great service (on time, within budget, easy to work with, project management, client appreciation, good reporting), premimum content (integration / time on page / content you like to be associated with), very good reach of your actual audience (at a size your client feels comfortable with) and at a reasonable price that is cost effective against other media.

Let’s make that the norm.

Take your point but it is site specific.

What’s site specific?

Obviously I meant, what do you mean by site specific? If you mean not network, yip, that’s what I mean too.

Neil, expect it from the Daily Tele and not the SMH, have you looked at the SMH web site lately ….perhaps not, or you may have registered the type of rubbish they’re currently publising….a bit of internet snobbery there mate

PS it’s Fairfax discounting not News, and it’s not just their websites either

Hey Jenene,

Frequency capping should be detemrined by the nature of your site and therefore visitors.

If the nature of your site is a weekly visit then a frewquency cap of 6 uniques per day is fine.

However if you are a daily news site then different story – hence the frequency of 42.

Cheers
Q

Harold must be filthy – bilking his clients for 20% of a paltry $3 per thousand. It’ll make it tough to get that volume bonus.

I guess the digital sales team hadn’t picked up on the conclusions within one of their own articles:
http://business.smh.com.au/bus.....-8i1u.html

By treating their content & ad space as a commodity and making audiences reload multiple pages (and ads) for longer articles, Fairfax opened itself to the potential of being cheapened in the rush for digital dollars.

Awesome time right now for smart digital traders/agencies with the benefit of clients with a long-term view on adspend (FMCG, Auto, Finance) to strike market leading deals (& not just on price) for the next 12 months.

All very clever guys, but how many hours of your employers’ time has gone into this exchange of opinion? Only five comments have been posted outside of business hours.

Thanks for the lesson Bill on economic reality. I reckon the fight is probably worth it. And I checked with the boss, she said it was okay ;0)

Bill: Mobile Phones are a fantastic use of time in the cab between meetings 🙂

And before you check my IP Tim, we all know that most prviate internet browsing is done during work hours… that’s what makes internet advertising so affective.

Ahh – Fairfax slashing jobs, slashing prices – print people running an online business….who’s really up who and who hasn’t paid?

Fairfax are playing a very dangerous game in the race to zero and seriously de-valuing their long term offering. The sentence “that isnt what we paid in June” will come to haunt their future negotiations. Why don’t media publishers take a lesson from the travel industry’s flight pricing model which rewards for loyalty and early booking instead of this last minute car boot sale?