Fairfax’s Pippa Leary warns – now banner ads are commodotised let’s not do it to video too
Fairfax is looking to the likes of video and targeting ads based on user behaviour to break the dominance of commoditised banner ads, commercial boss Pippa Leary said today.
Speaking at AIMIA’s future of digital advertising summit, Leary said that banner ads had accounted for 90% of Fairfax’s digital display revenue a couple of years ago. This declined to 75% in 2009, and 62% this year. She said the target for next year is 45%.
She told the audience that banner ads had been caught in a spiral of commoditisation, and Fairfax Digital will try to avoid the same thing happening again.
She said: “We don’t want video to get commoditised. It’s about engagement. The exciting thing about the rise of video is about its ability to create emotional responses.”
She added: “I’m sure everyone is tired of hearing about the commoditisation of the humble banner.
She said it had been caused by a massive oversupply of inventory driven by the rise of social networking sites, more local viewing of international sites with locally targeted ads and advertising on the long tail.
She said: “It’s not like it’s anybody’s fault. But the CPMs have been driven lower and lower and lower.
“We have to look at different ways of monetising the audience. Otherwise we would not be able to make enough to pay for the content produced.”
Citing Fairfax Digital’s move away from relying just on banners for revenue, she said: “Unlike other industries that watched their rivers of gold dry up we started to do something about it.”
She said the company had introduced “next gen solutions” such as video advertising and behaviourally targeted ads.
She added: “We’ve invested in people who have skills we did not have before.”
But she warned that a focus on price and data had been to the detriment of the quality of the ads themselves.
She said: “We’ve fallen in love with the data and we’ve forgotten about creativity.”
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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“She told the audience that banner ads had been caught in a spiral of commoditisation, and Fairfax Digital will try to avoid the same thing happening again.”
At the same time theage.com.au has 17 ads on the homepage, the SMH 18 on its …
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Did anyone else sense that a few of the panel speakers seem to feel that agencies are almost holding back the growth of online advertising?
An example was from Mark of Sensis Mediasmart when he said that he is having to approach clients direct and it appeared it was because agencies did not appear to be embracing his product. He is finding that clients do embrace it and get great results but the agencies do not want to touch it?
It will be very interesting over the next 5 years. Darwin Tomlinson who is at an agency in Sydney now, (he was in NYC only weeks before) appeared to paint a similar picture and cast an image to me that many agencies in New York are not getting their clients represented online adequately; or are rushing in to embrace fads when not actually fulfilling their clients brief (the whole social networking bandwagon / what works for some might not work for others…) – I am not calling social networking sites fads – they are very important for advertisers when leveraged correctly
Over all well done to the organisers – it was a good show.
Great questions from the man at the back also… 😉
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I would disagree with the comment that agencies are holding back the growth of digital – just look at the growth the channel has experienced over the last few years. What is happening is that as digital opportunities in market expand, where the budget is directed is also expanding, with agencies recommending solutions that will meet their clients objectives. This means that not all publishers are growing at market rates and it’s this gap which is worrying to them as they fight for market share & growth targets.
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