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Future of Branded Sites Unclear

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So, are Web publishers totally screwed -- or aren’t they?

That’s not the official theme at the Interactive Advertising Bureau’s annual meeting (it’s actually "Revenue: the Next Wave"), but it appears to be the reigning question at the event, which is being held this week in Carlsbad, Calif.

Based on the topics discussed by various speakers thus far, the future of ad-supported traditional branded sites is very much up in the air. The ongoing threat of ad networks, exchanges and demand-side buying platforms turning sites into commodities has many asking scary questions -- while others are expressing steadfast defiance.

During a session focused on mergers and acquisitions in the digital space, Tolman Geffs, co-president of the Jordan Edmiston Group, posed the question, “Is brand advertising in decline?" He pointed to dropping stock prices at the NYT Co. and Yahoo and shared ominous stats for publishers who earn a living selling traditional, context-driven brand opportunities. According to the data, in 2009 more money was spent on direct marketing and promotions than branding.

For digital, he predicted that branding and direct response tactics were starting to blend. “We think this is not just the economic cycle,” he said. That means advertisers are purchasing audiences, rather than buying ads on a site-by-site basis. Geffs estimated that 80 percent of display inventory is sold directly, but by next year that figure will dip to 70 percent.

“Tons of players [are] getting into the audience-selling market,” he said. “Premium publishers are losing a key advantage.” Historically, publishers have sold brands based on premium content and premium audiences, but that dynamic is fading, Geffs said.

Of course, that’s not a trend most traditional Web publishers are crazy about, but it’s inevitable, according to David Moore, chairman and founder of 24/7 Real Media. During his keynote address. Moore said that agency-led demand-side platforms are here to say, and publishers must accept that fact.

Making matters even more complex, the online ad process is becoming increasingly crowded.

With more players involved in the display ad chain -- from ad serving companies to exchanges and data suppliers -- publisher margins are taking a beating, said Geffs. An online ad buy generating a $5 CPM may result in just $1 going to the publisher that sold it, according to his data.

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