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Adotas is also doing a Premium v. Remnant series. In the post Noah argues that:

As brand marketers better understand the level to which they are overpaying for inventory, publishers will face significant pressure to either open up their unsold inventory directly to the brand marketers or to stop selling unsold inventory at the discounts currently allowed.

In general I agree with Noah that the gap in pricing between “Premium” and “Remnant” is too large, but I don’t think there’s any risk to a publisher’s bottom line. If the numbers quoted, $10b for DM and $5b for premium are correct, then only a third of spend is at risk from more efficient brand pricing. Also, the amount of brand money online is growing every year, meaning more competition for inventory and higher rates. I expect both publishers and advertisers to get smarter over the coming years and fewer inefficiencies where “premium” inventory sells for so much more than “remnant” but with the continued growth in spend and technology I don’t expect many publishers to see a drop in overall rates.

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

I’m looking forward to the rest of the series! I do hope though that they would stop referring to non-guaranteed inventory as “unsold”, especially if it’s a $10b market!

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  • David Shay

    Hey Mike — Totally dig all your stuff on Premium v. Remnant and very glad that this topic is getting a lot of attention. By way of full disclosure, I am VP of Marketing for CPX Interactive, an ad network proactively focused on monetizing “remnant” inventory (as well as “premium”, of course.) Anyway, worth mentioning is that on reason these terms came into being is that there is a conceit in the industry (true or not) that the first few pages/impressions seen by a user are more are more likely to be clicked, and are therefore worth more (read as — are more premium) then the users 5th, 6th, 7th…etc… page/impression on the same site visit. Our CEO addressed this well in this in this blog post: the original high profile ad networks

    Also, it is worth noting that the growth of “remnant” inventory is making mainstream headlines. At the risk of a shameless plug, here is a CNBC feature on CPX, specifically on point.