The SmartMoney's On Scarcity; Personal Finance Site Cuts Ad Units

imageAside from the poor state of the economy and the media business in general, the downward spiral of display ad spending has pretty much been pinned on too much inventory and relatively little demand to fill it. Last October, the Hearst and Dow Jones-backed personal finance mag SmartMoney started to cut the amount of ads it ran on its site. AdAge profiles the results, which were sparked by the sudden drop in click-throughs after the global financial meltdown began gathering force. Since no one was paying attention anyway, SmartMoney erased the ads that would appear at the bottom of a webpage and cut the number of available units on each page from three to two.

The early outcome was a 21 percent gain in aggregate click-throughs, SmartMoney claims. And former advertisers like Scottrade and Options Xpress suddenly came back as well. In the end, the site’s Q4 inventory was sold out. In all, SmartMoney says the 30 percent cut in inventory probably helped lead to 15 percent to 18 percent growth in pageviews — though down 12 percent in total impressions. But to advertisers, the number of impressions might be less important these days as publishers try to find the best balance of users, advertisers and inventory. As Rubicon Project CEO Frank Addante tells AdAge, simply cutting the amount of inventory won’t magically push up ad revenue. It comes down to carefully deciding the timing of an ad and ensuring that its quality matches that of the site.