In the big bad media world, conglomeration has been a vital component for financial success. This has been acutely true in the print publishing realm at places like Herst, Conde Nast, and Time Warner. Where the returns to scale, resulting from printing millions of copies, are what drive incremental printing cost down to the the lowest levels. To the point where your average magazine subscription is $10 a year for most monthly publications, closely approximating the industries marginal cost. With that size comes other advantages for reduced overhead. This is common knowledge and widely remarked upon.

What’s not talked about is that this also creates an inefficiency for ad buyers that allows for rent seeking on the part of the publishers.  Blast ad buying, which is MOST ad buying, works on a fixed CPI. The problem is that a great many of those impressions are wasted, rejected, or simply missed. But you still have to pay for all of them, regardless.

For the last few centuries that was just the nature of the beast, whether it be broadcast TV, newspapers, magazines, or display signs. Until the internet removed that inefficiency…

Internet ad buyers want every single piece of measurement information that they can get their hands on. They want to know how many page views their ads were served on, what was the placement rank, and how many people actually engaged the ad by clicking.

All of this efficiency in measurement has eroded profit margins on web display advertising. They know too much.

maybe…..

But maybe these firms still know something else. Media firms know customer purchase history, web clicks, email opens, sweeps entered, articles read, mailing address, gender, types of credit cards held.

Time started to use this information for their print magazine in the same way others were using it on the Web, to better target advertising on a regional and demographic level. (TV Guide used to do the same thing, but it also had a distribution of 90MM, making national ad buys prohibitively expensive for most buyers.)

But now Time has gone one more step with Mine.

This, I think, is a BIG step forward on the publishing side. Selecting content, is like opening an email, or clicking on a link: it reveals a preference.

Demographic targeting is useful but limited. Behaviorial targeting is better for publishers, consumers, and advertizers. Publishers can charge higher CPI’s then ever before, customers aren’t getting, what they view, as misdirected and misguided ads, and advertizers themselves remove the false positives, so their impact is far greater, with much less waste.

We’ll see how well people take to the idea, and if Time decides to run with it. But I will say one thing for sure, even if this particular example flops… this is the future.