An insider's view of Web advertising, from autos to remnant networks

Ford: Pros include an opportunity to buy premium inventory at fire-sale prices and either:

a) Sell it at half premium cost.

Or

b) Buy a ton of it on a CPM basis and back it out to a CPA that still earns a margin.

Cons:

• The amount of remnant inventory is not always known and changes (though it is predictable to some degree).
• Impressions are not always guaranteed -- the marketer doesn't know for sure that their ad dollars are going to be spent on a given site at a given time -- that's important.

Publisher pros:

• Fill gaps in inventory sales, still makes money on the eyeballs.

Publisher cons:

• Potential for wild, obtrusive, or malicious ads.
• Potential of undercutting sales team's efforts by selling inventory for too little.

TIS: How are the needs of East Coast and West Coast clients different?

Ford: This is indeed an interesting question. Let's first define "client." I sell to two types of clients (I'm in national sales, on the West Coast): One client is large corporation like the Fortune 1000. Another type is advertising/media-planning agencies, who, in effect are the advisors and budget-gate-keepers to most of the Fortune 1000 companies. So you can look at my ideal client as one with multiple stake-holders, or two with different buying patterns.

Agencies (and networks) on the West tend to be more performance based -- that is, they buy more inventory from CPA networks. Roughly 70% of all media spend online is in performance media. So, it's not surprising that performance media is selling strong, both on the west and east -- especially in an economic trough where marketing budgets really need to be accounted for.

West vs. East: The three-martini Madison Avenue media buys are still very common in New York City. They happen over here on the West Coast too, but in general, there are more technology companies on the West Coast. Silicon Valley is a prime example. And I believe tech companies tend to be more technical -- I'd venture even in their marketing tactics while small enough.

On the network buy side, CPA networks are optimizing their buys "on-the-fly," and they need fancy algorithms and programmers to build that trading technology -- a good pool of this kind of talent sits on the West Coast.

I think ad agencies and large companies on the West Coast all feel the nearest-neighbor effect of all that technology so close by -- so they're more likely to be in the performance-buying mindset. All that said, L.A. still has deep ties with brand buys -- how do you track if user x came to watch your movie? You can't. You can only track ticket sales at the movie house -- not specific users.

Ford also discusses online advertising on his blog, ExactAudience.com.

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