Contextual ad network ContextWeb is rolling out a new pricing model that allows publishers in its network to set their own CPM rates for their inventory. Publishers have long felt that Google’s AdSense program favors advertisers, leaving publishers with little control over pricing their inventory.
A test of the “Open PO” pricing model has been running at 100 publisher sites, including The Boston Herald, The Denver Post, World Now and Weather Underground. The model is now being made available to all publishers.
“There’s been no innovation in business models of ad networks presented to publishers in 11 years,” Jay Sears, ContextWeb’s SVP of strategic products and business development, told SEW. “In every previous model, the risk has been on the publisher. It’s time for the ad networks to shoulder the risk.”
He’s specifically calling out Google, which has traditionally been very limited in transparency toward publishers. Sears says that when Google launched AdSense in 2003, it was a step backward for publishers, who gave up a defined revnue share from ad networks to get an undefined share of revenue, with limited visibility, from Google.
While most current ad networks allow advertisers to choose the price they’re willing to pay, and require the publisher to accept that bid or hit the road, ContextWeb is promising publishers a new level of control over the pricing of their ad inventory. Under Open PO, a publisher will tell ContextWeb the minimum CPM they’ll accept, and only those ads exceeding that price will be shown. If an ad does not fit that requirement, ContextWeb can serve an ad from a competing ad network of the publisher’s choice. ContextWeb will continue to give pricing control to advertisers as well, offering CPA, CPM, or CPC models for its ads.
If the pricing is set properly, ContextWeb can usually fulfill 100 percent of the publisher’s inventory, said CEO Anand Subramanian. “A lot of inventory is undervalued, and a lot of inventory is overvalued,” he said. “One publisher shouldn’t have to subsidize the poor performance of another publisher, but that’s what’s happening with some ad distribution networks.”