Publishers need to use this NOW so they don’t lose money

When I was in high school in the early 90’s I was tasked with selling advertising for the school newspaper.  With little understanding of what media and printing was all about, I was told our school newspaper sold ads by the column inch.  But the column inch wasn’t a real inch.  It was 11 picas or roughly 1.83 inches.  This confused me as I didn’t understand how I was going to convince an advertiser to place an ad in a measurement that really wasn’t what it was.  I soon figured out that the column inch was standardized across all newspapers and it wasn’t unique to my particular school.  After I mastered the column inch learning curve, needless to say I was much more successful at selling newspaper ads than trying to explain what it is.

Why there’s no standard native advertising metric?
The column inch advertising standard transcended into internet display advertising and morphed into pixel dimensions.  Now coveted Internet real estate is largely traded as leaderboards (728x90) medium rectangles (250x300) and over thirty other standardized sizes.  As native advertising has rushed into the foray of publisher offerings, standardized measurement for native formats is creeping slowly along in it’s wake. Unlike our print ancestors, the extreme diversity of digital formats and native advertising’s unlimited dimension possibilities creates a damper on measurement consensus.  

Why the RPM metric won’t work for native?
Internet display advertising has conditioned publishers to measure their opportunity cost with revenue per thousand impressions (RPM).  The fact that a publisher can easily compare two standardized display ad units in the same place from different advertisers or networks and come to a quick decision is empowering.  However, since native ad units can be configured in infinite dimensions applying that same methodology is futile unless the units being compared are the exact same size.  The same holds true when comparing a native unit to a display unit.  

It all comes down to 1,000 pixels
Just as the economics of disparate commercial real estate is evaluated using the revenue generated per square foot, the same can be applied disparate digital real estate except using the revenue generated per 1000 pixels.  Boiling down ad units to the amount of revenue they generate by the amount of digital real estate they inhabit is the most accurate comparison methodology.  

How To Compare Native vs. Display Units
It’s easy to compare a native ad to a display ad to figure out which ad unit is more valuable based on the revenue generated per one thousand pixels (RPMP).   

Native Unit
Dimensions: 400x200 = 80,000 pixels
Total Monthly Revenue = $1400
RPMP = 80,000/1000 = 870
$1400/80 = $17.50

Display Unit
Dimensions : 300x250 = 87,500 pixels
Total Monthly Revenue = $1500
RPMP = 87,500/1000 = 87.5
$1500/87.5 = $17.14

RPMP Native $17.50 > RPMP Display $17.14

Even though the display unit generates more revenue the native unit is actually more valuable because it generates more revenue per 1,000 pixels.

Publishers can make better decisions on how to configure their digital assets using this simple formula.

For more examples, visit our Web site at www.goldlasso.com. Examples and recommendations are fully covered in Gold Lasso’s “The Email Monetization Playbook”. Click here to download this definitive guide for publishers -- offering more than 150 tips for optimizing email monetization with concrete examples, illustrations, and pitfalls to avoid.