Newspaper Association of America: ‘Digital Ad Inventory

  • David Chavern
  • 03.31.2016

Originally published on Digiday. Read the full article here.

David Chavern is president and CEO of the Newspaper Association of AmericaChavern_David_Web

One of the great – and completely misguided – tropes of the digital age is that “digital ad inventory is infinite.” The thinking goes that ad inventory in more traditional media is limited by physical space (print) or time (TV and radio), and that this scarcity supports ad values. The Internet, in contrast, has vast and undefined borders – and thus the supply of ad inventory is “infinite.” Infinite supply means that value of digital advertising eventually gets driven to zero, or close to it.

This idea is amazing both because it is completely pervasive among media professionals – and also because it is completely false. It is sloppy economic thinking at a very profound level and gives people a misguided idea about the future of ad-supported content on the Internet.

Let’s start with the understanding that the vastness of the medium is not very important. After all, print, TV and radio are all pretty vast media. What is important is the supply of people’ attention that is available, and that is very limited. While the current measurement of most digital advertising is “impressions,” that metric doesn’t accurately capture what advertisers really want – which is consumer engagement and a real slice of the precious supply of the public’s attention. There may be an infinite number of places to display ads, but the only inventory that really matters exists on those sites where ads catch the limited attention of the right consumers at the right times.
Read the full article here.

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  • David Chavern
David Chavern serves as President & CEO of the News Media Alliance. Chavern has built a career spanning 30 years in executive strategic and operational roles, and most recently completed a decade-long tenure at the United States Chamber of Commerce.