Comments on: Premium vs. Remnant — (Part I — Supply)

By: Jason Cunningham

Jason Cunningham — Wed, 14 May 2014 23:07:00 +0000

Thanks for the great article. Have your views stayed the same over the last few years? With RTB is there a way to set different floor prices based on country? It may be a crude way to determine the value of an impression, but over time it could definitely be optimized.

Jason
(949) 754-5284

By: Free Zip File Repair

Free Zip File Repair — Wed, 07 Mar 2012 07:05:00 +0000

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By: Menon

Menon — Fri, 13 Feb 2009 15:19:42 +0000

“One impression is most definitely not the same as another.” Well, perhaps, the supply in this case consists of many products where each “product” is a set of impressions that can be clubbed together based on their “attractiveness”. The supply itself is still “impressions” even though all impressions are not created equal, no?
So in traditional terms, a supplier (publisher) such as cnn could say that they supply X impressions worth $Y and so on.
Thanx for your posts – I am learning quite a bit!

By: Scarcebits.com - Digital business and economics by Marc-Antoine Lacroix » Adspots: inelastic supply curve?

Sat, 26 Jul 2008 16:35:08 +0000

[...] http://www.mikeonads.com/2007/05/10/premium-vs-remnant-part-i-supply/ [...]

By: Joydeep

Joydeep — Sat, 23 Feb 2008 23:04:22 +0000

Interesting post. I don’t quite agree.

It is clear that depending on the shape of the demand curve, decreasing supply may even increase revenue. So obviously, publishers are motivated to control the supply.

this fits in nicely with the fact that there is a natural segmentation in the market between direct response and premium – and they have different demand curves. so the aggregate supply pool can be broken into two pools such that the overall revenue is maximized.

i think i am stating the obvious (and i see u are pointing to the Adotas articles as well – which are saying the same thing).

but good series of posts nevertheless!

By: VentureBeat » ADSDAQ, one of the last indie ad exchanges

VentureBeat » ADSDAQ, one of the last indie ad exchanges — Sat, 11 Aug 2007 00:00:42 +0000

[...] that hasn’t already been bought through other means (though Right Media’s Mike Nolet takes issue with the distinction between “premium” and “remnant” [...]

By: Mike On Ads » Blog Archive » Adotas Premium v. Remnant Series

Mike On Ads » Blog Archive » Adotas Premium v. Remnant Series — Fri, 10 Aug 2007 14:50:07 +0000

[...] written about this extensively in my Premium v Remnant series, which you can find here — Part I, Part II and Part [...]

By: Mike On Ads » Blog Archive » Premium vs. Remnant — (Part III — Remnant)

Thu, 17 May 2007 04:55:19 +0000

[...] Premium vs. Remnant — (Part I — Supply) [...]

By: Mike

Mike — Thu, 10 May 2007 21:58:48 +0000

Ah, you steal my thunder! Indeed — Part II will be the demand side discussion. You got it exactly right — it’s more of a forward contract v. a spot market. More to come!

By: Greg

Greg — Thu, 10 May 2007 15:59:11 +0000

Good post. I’d agree that whether inventory is deemed ‘premium’ or not has nothing to do with the actual ad impression. However, I disagree slightly with the phrase “inventory is deemed premium based on the buyer.” Instead, I’d argue that inventory is deemed premium based on the manner in which it is bought, and you think it’s based on the buyer because agencies overwhelmingly buy one way, and direct marketers buy in another.

The ‘premium’ stuff is generally reserved in advance and is as close to guaranteed as possible – the contracts for buying ‘premium’ all have punitive ‘make-good’ clauses if the publisher doesn’t deliver. The ‘remnant’ stuff might be purchased in advance, or it might be auctioned off in real-time, but the publisher doesn’t face the threat of make-goods if he doesn’t deliver.

As you might expect, this advance reservation comes at a price – the advertiser pays a ‘premium’ for it. But my theory is that this is fine for the big agencies, who are motivated to spend *all* of their advertising budgets (if you don’t spend it you’ll lose it next time around) and who don’t want to deal with the risk that they might spend less than their allocated budgets.

So, definitely ‘premium’ vs. ‘remnant’ is misnamed, and it probably should be renamed something like ‘reserved’ vs. ‘pre-emptible’. (Or, if you like Wall Street analogies, ‘forward contract’ vs. ‘spot market’.) But I still think there’s a useful distinction somewhere in there.