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We’ll See More People Talking About Remnant Inventory

December 7, 2006 5:15 pm / Leave a Comment / Pat McCarthy

It’s great to see Yahoo talking about how important it is to their business moving forward to do a better job focusing on monetizing their remnant ad inventory. It’s nice to be a part of that strategy due to their investment and client relationship with Right Media.

But more importantly, I think this will be a trend we’ll continue to see. We’ll hear from more established players in the web advertising world about the importance of monetizing remnant inventory. Why?

Premium advertising is great, but it isn’t scaling at the same rate as all the ad inventory on the web. Only certain types of inventory can really be classified as premium and achieve the results that justify the rates. The rest of the inventory has been looked down upon by publishers in the past, but not any longer. The catalyst for this is user-generated content and the explosion of sites that benefit from it. There is an insane amount of ad impressions now, and it can’t all be sold as premium.

The key to this is that publishers can be profitable and have great businesses even if they don’t sell much premium advertising. If you monetize remnant inventory effectively, you can have a great business. What do I mean? Well, let’s say you have a web site with the following statistics:

  • 100 million ad impressions a month
  • 75% of those impressions are non-premium (remnant)
  • $0.50 average eCPM on non-premium impressions

That comes out to be $37,500 in revenue per month in remnant inventory. Not bad for a mid-tier publisher. Let’s say you can monetize that remnant inventory better and get that $0.50 eCPM up to $0.70. Now we’re talking $52,500 in revenue per month, an increase of $15,000!

How is that possible? Well, there are lots of ways you can monetize remnant inventory better, but that’s probably best saved for another post or series of posts. Either way, the amount of remnant inventory out there is only growing, and the ways to monetize it are only getting better, so expect to hear more about it from both big and small players alike.

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