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Microsoft vs Yahoo – A different look
Written by Sachin Devand   
Tuesday, 08 April 2008

Microsoft vs Yahoo – A different look

 

If you have been keeping up with what is going on between Yahoo and Microsoft you might be wondering what the future holds for Yahoo. With time running out on Yahoo, no one knowing what first quarter numbers would look like for Yahoo, can it overcome the takeover bid from Microsoft. If they cannot come up with a plan for the shareholders they might lose credibility with them. At the same time Microsoft has threatened Yahoo that they would go directly to the shareholders, fire the existing board and get a new one. In a desperate attempt, Yahoo announced their self service advertising platform for advertisers and publishers called AMP. So is this game over for Yahoo or could there be a silver lining to this cloud.

The Microsoft-Yahoo merger is not the best thing that happened to Yahoo.  A merger between the two companies might not be a best fist. Even though they are trying to do similar things the two companies are too different and a merger might not bring out the best in the two. Here is an alternate and it just might be that Yahoo, between its silences, might be working towards. A merger between Yahoo and AOL might be a very good thing for both the companies. Both the companies are quite alike and have similar goals. Both are trying to find the best strategy for gaining online presence. Both companies are trying to gain a piece of online advertising pie. They are both trying to compete with Google to steer away their advertisers and publishers.

Here is what Yahoo and AOL are to gain should a Yahoo-AOL merger go through. Following are some of the ad networks owned by AOL and their rank in terms of audience reach:

1.       Advertising.com (Ranked 1)

2.       AOL Media Network (Ranked 8)

3.       AOL (Ranked 13)

4.       Tacoda – A behavioral network ad network which has a pretty good reach (not ranked here).

Yahoo on the other hand has the following ad networks:

1.       Yahoo network (Ranked 2)

2.       Yahoo web site (Ranked 14)

Combined properties of Yahoo and AOL would be a good adversary for Google, at least a better one than Yahoo-Microsoft. The only assumption is that Yahoo-AOL can get their acts together quickly and leverage these properties. Recently both Yahoo and AOL have been acquiring a bunch of small to medium companies in online advertising space. All of these put together are a very strong portfolio of advertising tools.

Yahoo might be pushed towards doing a deal with AOL and this just might be the silver lining that could make these two companies and put them back on the advertising map.

 

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Last Updated ( Thursday, 31 July 2008 )
 
What is ROS or RON?
Written by Sachin Devand   
Tuesday, 08 April 2008

What is ROS (Run of Site) or RON (Run of Network)?

 

Definition

Run of site (ROS) is a phrase used to define inventory (page loads) that publishers are unable to forecast ahead of time. As a result of this they don’t have advertiser spending lined up. This causes them to dump such inventory at dirt cheap prices. Another form of ROS inventory is inventory coming from some sections of publisher site which cannot be sold as premium inventory. For a newspaper site, such sections could include, job postings, obituaries, personals etc. Such sections have very low value for an advertiser and are thus given up as ROS inventory.

A lot of ad networks buy ROS inventory from publishers and try to make a profit by either reselling it or running direct response or branding campaigns on them. Such a collection of ROS inventory on an ad network is called Run of network (RON).

Typically ROS/RON inventory is prices quite cheap compared to premium inventory. As a result it is expected that it will perform poorly compared to premium inventory.

Why this happens?

Pages that do not have good content cannot be sold as premium inventory. There is nothing much one can do about such pages. They will end up as ROS inventory. A bigger problem for the publisher or an ad network is when they have a surplus of impressions for a given month and no advertisers lined up to serve ads. Such a case can happen either when a publisher does not make accurate forecasting about their future traffic or there is a spike in the traffic coming to the publisher. As a result the sales team sells only what was forecasted. If the publisher receives more traffic than forecasted then it will end up wasting those extra impressions. Since media buys are done weeks if not months ahead of time, any changes in inventory cannot be sold immediately.

A balance is met when another ad network or advertiser steps in and offers to buy such inventory. The catch is that the advertiser will not pay premium price for such inventory. They will just buy it at ROS price. This lets publishers dump their surplus inventory at whatever price they can get and advertisers get a steal deal. The only catch for advertisers is that they can potentially end up with a mixture of ROS surplus inventory and real ROS inventory.

There is a big difference in the prices of premium and ROS inventory. For example, the CPM price of premium inventory might be $10.00 while ROS might be as low as $1.00. This is the reason why forecasting is one crucial aspect of publishers’ ad operations.  

 

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Last Updated ( Tuesday, 08 April 2008 )
 

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