ESPN shuns cheap ads

In a move that may have a lot of significance in the online advertising industry ESPN has decided to shun lower priced and sometimes questionably relevant network advertising where the placements are created by algorithms that try to match remnant advertising space with advertisers and publishers.

ESPN appears to be reacting to concerns that running this type of ad may dilute their brand as well as support the "commoditization" of advertising, fearing that the huge pools of many advertisers getting matched with huge pools of publishers will result in much lower cost per ad for premium publishers like ESPN.

The online advertising industry that is the key driver of much of the power and change on the internet. For example about 97% of Google's total revenues are derived from online advertising with about 35-40% of that total coming from Google's revenue sharing relationships with other publishers.

ESPN is encouraging other premium publishers to join them in what amounts to an advertising power play where premium publishers may come to demand higher rates for advertising. Although this play may succeed temporarily in driving up ad rates for some sites, the success of Google's mathematically derived ad distribution network both for publishers and for advertisers is an indication of how computers may match up advertising better than humans.

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