Users of the Internet are frequently presented with display advertisements within web pages. These advertisements may be in the form of banner advertisements, pop up ads, pop under ads, or other static or dynamic display advertisements within (or associated with) a web publisher's web site.
The goal of each these advertisements is to entice the user to link to the advertiser's web site for additional information and/or ultimately to solicit the sale of a product or service to the user. As such, displayed advertisements may be associated with a link such that if the advertisement is clicked, the user's web browser is redirected to the advertiser's designated web page.
Because of the above described dynamics of Internet advertising, certain terminology has evolved in the Internet advertising industry. For example: i) the event of rendering an advertisement to an end user within a web publisher's web site is generally referred to as an advertisement impression; ii) the event of a user selecting an advertisement, or clicking on the advertisement, such that his/her browser is redirected to the advertiser's website is generally referred to as a “click” or “click-through”; iii) web publishers may be referred to as sellers of advertisement space, sellers of Internet traffic, or sellers; iv) advertisers may be referred to as buyers; v) the quantity of impressions that a web publisher is able to deliver during a period of time may be referred to as its inventory or inventory of Internet traffic, or traffic available for buyers to purchase; and vi) the distinct portions of a web publisher's inventory that can be delivered to end users distinguishable based on end user attributes such as geography, demographics, and/or behavioral patterns may be referred to as segmented inventory or traffic segments.
For example, a web publisher which has traffic of 10,000 “hits” per day has the ability to deliver 10,000 banner advertisements per day. Therefore the publisher has an inventory of 10,000 banner advertisement impressions per day which can be sold.
Further, if the impression is delivered on a web page where user registration is required to access the web page, and such registration requires the user to disclose his/her gender, then the inventory of 10,000 banner advertisements can be segmented into a male segment and a female segment. If, on average, the 10,000 hits are 50% male and 50% female, the publisher has segmented inventory of 5,000 banner advertisement impressions per day as its male traffic segment and 5,000 banner advertisement impressions per day as its female traffic segment.
Advertisement inventory is generally priced and sold utilizing transactional units based on a per-impression transactional model or on a per-click transactional model. An advertiser purchasing placement within a web site utilizing the per-impression transactional model will pay a fee to the publisher (or a broker) that is calculated based on the quantity of impressions rendered. An advertiser purchasing placement within a web site utilizing the per-click transactional model will pay a fee to the publisher (or a broker) calculated on the number of end users that “click through” the advertisement impression to the advertiser's website.
In more detail, the most common transactional units are Cost-Per-Thousand-Impressions (CPM) and Cost-Per-Click (CPC). Other transactional units which require at least user interaction with the advertisement impression and click through to the advertiser's web site include Cost-Per-Lead (CPL), Cost-Per-Acquisition/Action (CPA).
Website owners generally sell their inventory utilizing one of two dominant business models. The first dominant business model includes a buyer initiating a request for proposal (RFP) process. The buyer's RFP may describe the advertising campaign in terms of its overall objectives for advertising a particular product or service over a distinct period of time. Further, the RFP may typically specify proposed sales goals, conversion goals and branding goals, and target user attributes likely to improve the campaigns success. As is typical of any RFP process, the buyer will distribute the RFP, particularly to those web publishers (or brokers) known to have inventory, or segmented inventory, suited to meet the goals and objectives of the campaign.
Each seller receiving the RFP may determine whether it has available inventory, or segmented inventory that meets the buyer's stated goals. If a seller has available inventory, or segmented inventory, that meets the stated goals in the RFP, the seller may submit a proposal for the delivery of inventory that meets all or part of the buyer's volume requirements. The proposal typically is a firm offer that remains open for the buyer to accept during a defined period of time.
The buyer then reviews those submitted proposals and selects/accepts those responses that the buyer determines provide the inventory most suitable for meeting the campaign objectives.
The second dominant business model includes use of an ad network. An ad network aggregates web publishers with available inventory and sells such inventory to buyers—which it also aggregates. Such inventory is often sold in a continuous auction meaning that an available impression may be sold, at least in part, to the advertiser with the highest yielding advertisement (e.g. the highest remuneration expected to be received for the lowest quantity of inventory to be delivered at such time as the impression is to be rendered to the end user viewing the publisher's web page.
For example, an ad network may categorize the web sites of several publishers within a topical category for purposes of defining available inventory associated with such topic. Advertisers would then place bids associated with such topic. As such, so long as the advertiser remains the highest bidder for such topical category, its advertisement content will be rendered over that of other advertisers placing lower bids. Further, the highest bidder may be determined utilizing relative yield between multiple bids.
The primary advantage of the RFP process is that the advertiser maintains control over: i) in which web publisher's websites its advertisement content appears; and ii) to which end user segments its advertisement content is rendered. This control enables buyers to select what it perceives to be the highest value inventory, or inventory segments, and makes it economically feasible for the buyer to pay a premium for such highest value inventory, or inventory segments.
An advertiser purchasing inventory through an ad network may only control the topical category on which the advertiser is bidding—but limited control over which web publisher's websites within the topical category will deliver its advertisement content to end users—and little control over the end user segments to which its advertisement content will be delivered.
As such, from the perspective of an advertiser, inventory purchased through an ad network is generally “less targeted” than inventory purchased through the RFP method because the ad network inventory is defined by the ad network categorization—not the buyer's campaign specific objectives. Therefore, from the perspective of an advertiser, the inventory within the topical category likely contains a composition of inventory that the advertiser would perceive as high value inventory and inventory that the advertiser would prefer not to purchase. A rational advertiser considers these factors when purchasing through and ad network and will therefore typically pay less per impression or per click per other action performed for such less targeted inventory.
Further yet, because ad networks often operate in an auction environment that is continuous, there is little predictability as to the quantity of impressions that will be delivered on a certain budget—as a buyer may be outbid at any time.
There are also disadvantages of use of an ad network from the seller's perspective. Because the seller's inventory is aggregated with inventory of other sellers within a topical category—and is generally purchased as a composition by a buyer, it is difficult for a seller to promote the value of its website or its traffic, or traffic segments, over other sellers within the topical category. As such, it may be difficult for a seller to realize the maximum value of the traffic, or traffic segments, that it could deliver on a more targeted basis.
Secondly, because of the continuous auction system, there is little predictability of the revenue a seller will receive for delivering inventory through the ad network—or even if there will be buyer bidding any minimum price at the time the seller is to deliver an impression—leaving what may be referred to as unsold inventory.
On the other hand, some disadvantages of the RFP process include the fact that the entire RFP process is very time consuming and labor intensive process for all parties. The RFP process also fails to create a true open-market environment for the sale and purchase of inventory because: i) buyers are limited in their available options for the purchase of inventory by the RFPs it sends out; and ii) sellers are limited in their opportunities to sell their available inventory to RFPs received and the efforts of its sales staff to directly sell their inventory to buyers, which may or may not result in the initiation of the RFP process, outlined above. As such, there are transaction and/or pricing inefficiencies that are mitigated in the Internet based open market created by an ad network.
In view of the foregoing, what is needed is a system and method for brokering the sale of Internet advertisement inventory as a discrete traffic block of segmented inventory in a manner that does not suffer the disadvantage of the present business models used for selling/purchasing Internet advertising inventory.
USPTO Backgrounds
USPTO Backgrounds