• by Bill Rowley , May 10, 2012

Everyone needs water -- and, not that long ago, we used to get it for free.  But I’ll go out on a limb and guess the last time you quenched your thirst with some refreshing H2O, it wasn’t from the tap.  Most of us have grown accustomed to purchasing bottled water, whether it’s an economy brand or some esoteric brand touting water from the oldest glacier in the world.  The bottom line is, we’re fueling a billion-dollar industry profiting from something that is essentially free and abundant. 

This is where publishers can learn a valuable lesson.

Digital media inventory is a lot like water: abundant and, if not free, increasingly inexpensive.  Whether it’s being given away as a value-add or being sold for just pennies, as an industry we’re drowning in undifferentiated inventory.   

According to a study by Ignition One, CPM rates for online display advertising have fallen 23.4% year-over-year despite a healthy 21.0% increase in ad spend. The advertising industry is clearly experiencing a severe supply-and-demand imbalance. Based on comScore figures, 2012 should see 4 trillion display ads served. There’s simply not enough demand to fill those impressions, and prices are falling. The solution to date has been to create additional inventory to make up the difference, a tactic that’s not working. However, if publishers follow the lead of the bottled water industry, they will see a better approach.

Just as water morphed from the tap to Perrier, advertising has gone from standard display to rich media.  The inventory is the same, but the packaging has changed; it’s more engaging and cooler.  And it’s worth more.  Publishers can follow some of the same steps the bottled-water companies employed when making consumers not think twice about spending hard-earned money for water.

1. Remove the impurities: The first big marketing push for selling bottled water was that it was better because all harmful impurities were removed.  Similarly, publishers can remove the impurities around their sites. By cleaning the clutter and placing ads next to relevant content above the fold, performance will increase. 

2. Packaging:  Stroll through the bottled water aisle, and you’ll find options that are almost like sculptures.  Elaborate bottle designs and artistic images are designed to grab consumers’ attention and imagination.  Like the designer bottle, ads come packed with many eye-catching layers that are made to engage users.  High impact units like IAB’s Rising Stars offer sight, sound and motion.  Whether it’s video, photo galleries, or interactive maps, these units are packaged as more then a standard static banner ad.

3. Customization: There’s a water variety for every lifestyle and every taste. From vitamin-enriched varieties to sports-themed bottles to energy water, the bottled water manufacturers have a product that targets every type of demographic.  Publishers should also be able to target any type of audience.  Leverage your audience data and build rich audience segments for advertisers looking to reach a specific audience.   You can segment your readers by demographics, behavior, psychographics, or other custom segments that increase the value of your available inventory.

4. Influential: The bottled water craze had a time when it was about feeling exclusive, sophisticated and classy drinking a Perrier or an Evian.  As more and more people began buying bottled water, celebrities were used to sell specific brands and everyone wanted to be like the influential personalities pushing the product.  You can turn your own ad inventory into an influential tool by building social media sharing plug-ins into your creative.  This helps create a social chain reaction of additional eyeballs viewing a particular ad, and ultimately your Web site. The benefit is not only the recommendations but also the ability to share and to accumulate those recommendations so that someone outside the social network of the viewer can find it. 

5. Tell a story: There are a number of varieties of water that try to tell a story to the consumer: what far off land it comes from, how old the water source is, etc.  The product is tied back to a compelling story.  Your ad inventory should be tied to original content.  Work with your editorial team to produce engaging content that can be sponsored by a relevant brand.  Advertisers want to be part of the story.

The above is pretty basic marketing – differentiate your product.  But the rewards are still out there for the publishers who do these basic things well.  Think about it the next time you pay $4 for a SmartWater.