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The Dynamic of Premium Value

May 30, 2012, 2:58 PM

 

One positive outcome of conference sessions is the opportunity to explore issues and concepts that shape our industry; some issues representing hurdles to the industry, some representing building blocks.    

One of those issues is the distinction of “premium” and “remnant” inventory. This distinction is sensible: there are well-recognized, premium brands that sell premium ad space through sponsorships and direct deals; everything else is remnant. But that distinction is complicated in mobile advertising due to three core reasons: 

1. Brand vs. mobile brand: There is certainly universally assigned brand equity to some publishers and developers (NFL and Reuters are two good examples). There are also established and emerging mobile premium brands (such as Zynga and Rovio).  These brands have taken flight due to the innovation, excitement, and quality of the product and the highly dynamic consumer behavior that rallies around a new app or game to create a new “premium.” 

Both definitions—traditional premium and mobile premium—are relevant, but it certainly complicates the previously cleaner lines of brand strength and non-brand strength.

2. Static premium vs. dynamic premium: This is the more relevant point. The legacy definition of premium was a fairly permanent assignment; along with the brand value, specific placements such as the homepage were premium, others were not. 

That generally makes sense from a publisher-out standpoint—but consumer behavior and the logic of location-enabled mobile commerce heavily complicates that static assignment of value. The location-enabled impression is valuable because that consumer is “there” at “that time” such that there’s an opportunity to serve an ad that can effectively promote events, offers, promotions, or stores in proximity to place and time. This means the application of “premium value” is assigned based the intersection of consumer behavior and campaign goals, which are both variant and dynamic.

3. Rich media enabled ad units: One of the more important factors lifting and maturing mobile advertising is the growth of engaging, high quality rich media and video ad units.  The availability of the rich media and video ad units creates a premium opportunity for campaigns.

Now, the legacy definitions of premium and remnant are not throwaways—that would ignore the obvious impact of brand strength. But the effective definition of mobile premium is more variant and dynamic. I should add that this stipulates that the publisher or developer goes transparent to ensure that the potential value of the location and ad unit can be fully realized.

As we work to grow and mature this space, I recommend that we adapt the prior premium/remnant distinction to consider the characteristics of the mobile medium. Specifically, I recommend a blended measure of “Dynamic Value” that considers both classic assignments of premium (that recognizes brand strength, the underlying value of context and the audience demographics that correlate to premium brands) with the consumer-driven, situational dynamic assignment of value. 

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