"Publishers" Struggle in the Digital Age

Some students in English 202 do not understand how advertising works in the digital age. Publishers--companies that maintain websites, such as NYTimes.com, Disney.com, WSJ.com, and ESPN.com, tell ad exchanges what space and time advertisers can buy on their webpages. Advertisers then buy depending on the demographics of the site. These companies conduct all these transactions on an automated basis. (Ad exchanges act as auctions of advertising space and time slots for websites.) However, not all publishers sell "all" their space on an automated basis. Advertisers and publishers agree that some space and time slots offer the best possible results, such as the opening page of each edition of the NYTimes.com. Publishers sell these spots to advertisers individually, and they offer only their most basic or generic "space" on ad exchanges, hence the reason for the following AdAge post:

Big publishers don't want to release premium inventory to automated purchase because they fear commoditization. The persistent fear is that selling through automated channels creates an opportunity for buyers to get the same inventory at reduced rates. And indeed, finding the same inventory via automated routes could make direct buys unnecessary. So publishers release generic inventory only, which undermines the potential of automation.
Premium display units are excellent tools for delivering branding messages, and automated technology enables advertisers to value impressions on their own terms. That sounds like a match made in heaven. If a highly sought-after audience target lands on a page that has premium ad slots available, several advertisers are likely to bid, which will drive up the price. Auction models reward the highest bidder, not the most conservative one – that's how Google has made so much money on premium search keywords for years. Read more.