Focusing on the supply: Good move Pubmatic

Very nice press release by Pubmatic this morning. The company is focusing it’s business on helping publishers manage their business.

http://www.marketwire.com/mw/release.do?id=840717

An expression I am fond of using nearly every day, is that the online media display world is one where “demand is large and supply is constrained specifically by qualititative factors.”

As we all know the definition of quality is a very vague one. Sell a brand advertiser and it’s reach and uniques. Test out a direct marketer and it’s all about optimization and direct ROI. The juxtaposition of these metrics creates a very volatile marketplace.

That’s why I like Pubmatic’s announcement this morning. They are essentially serving their clientele (niche publisers) and showing the value of inventory directly through pricing by stating, matter-of-factly through their data review, that the ecpm on small publishers is higher than large publishers.

Pubmatic is further excluding brand advertisers from the review so as to not introduce volatility and noise into their data.

The result? A benchmarking service where a publisher can evaluate their inventory and see if they are performing better, on par or worse than others in their space in terms of performance-based spend.

This helps with a few things:

- understanding if there is more room in their remnant or dr-based inventory

- determining the confidence factor of expecting a similar eCPM the following month

- understanding trends to improve content on their site or migrating directionally towards a certain CPM

- evaluating whether they should go out and hire an expensive sales staff (for brand focus)

At the very least, it shows to publishers that: a) Pubmatic is their advocate and b) there is value for being part of the Pubmatic “network.”

Sounds like a forthcoming convergence here between players like Rubicon Project (mostly remnant-remnant to date), AdRoll, Pubmatic, OpenX and an assortment of others.

Will be interesting….

More on TechCrunch: http://www.techcrunch.com/2008/04/07/pubmatic-data-suggests-small-sites-command-higher-rates-for-remnant-ads-than-large-sites/#comments 

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