‘The False Allure of a Premium Panacea’ by Carl Nelvig, VP of Product Development, Burt

Let’s face it. We’re an industry that loves a good buzzword. We latch on to certain terms as if our careers – our very lives – depended on it. A couple of industry visionaries get to talking about some trend and we seize on it like it’s Gospel. Next thing you know, lunch tables and water coolers around the industry are abuzz with what promises to be the next big thing.

However of all the buzzwords we hear (and admittedly incorporate into our lexicon), perhaps the most trite and overused is ‘premium’. Premium gets bandied about like a Justin Bieber song lyric, and we’re so fascinated by the guy and his manicured hair, we overlook the fact he can’t sing (sorry Justin).

In our circles at Burt, we regularly hear, “I only buy premium placements for my campaigns,” or “This is a premium ad network,” or “We only work with premium sites,” or, my personal favorite, “We have both premium and non-premium placements.” The term ‘premium’ is so overused in so many contexts we no longer know what it means.

Perhaps the most common misconception is that something is premium because of its high price. Wrong. Another popular concept relates to the reputation of the site on which the ad runs. Nope. Then there are those who argue what makes premium is a specific audience. Wrong again. Still others assert it’s the quality of the media placement. Sorry. You don’t win the lovely five-piece living room set.

What makes things premium is YOU, as premium is a subjective term and, like beauty, it’s in the eye of the beholder. There’s no one-size-fits-all definition of premium – premium is only as premium as what you define it to be. Giving every single ad placement a ‘premium’ designation not only dilutes value by commoditising what was once a valuable asset, it undermines the promise of digital and obstructs the flow of dollars our way. We need to end our fixation with the word ‘premium’ and start dealing in harder, more well-defined terms.

Here’s what I humbly recommend.

Let’s establish a set of guidelines of what defines a premium solution or placement so not every Tom, Dick and Harry can call what they have premium. We can simply define the term – like we did for outdoor, or digital display or paid search. We define and grade meat…and milk…and hotel rooms, and all manner of other things. Thus, it would seem to me we ought to be able to define and grade placements. It can’t be that hard.

Keep in mind though, setting up a bunch of rules won’t get us to Valhalla. We first need to understand the true nature of premium as a concept, and then and only then can we set rules around it. It’s not just those performing best earn the designation premium, rather we need to establish premium as a relevant and valid cross-platform category.

So, now that we agree there is no single definition of premium, but rather a custom set of properties for the advertiser or campaign in question, let me try to establish a few ground rules. Here’s a first stab:

Ø Choose media and formats based on campaign goals: brand building vs. direct response: right frequency and right media quality. (For deeper insights in media quality, you can check out my previous post.)

Ø Define your target audience and make sure the chosen media meets these requirements: right people.

Ø Make sure the ads are placed in a suitable context in order to be integrated naturally with the content, in other words ads are native: right audience at the right time.

Then, let’s caucus with our friends at the IAB so digital media companies will agree to make standard IAB formats part of a more native user experience. As we shouldn’t muddy the waters with vacuous terms, so too should we not create confusion with amorphous formats. In our push towards sponsored content and native, with native being the most promising thing we’ve seen in a decade, let’s not reinvent the wheel. Let’s use what we’ve got in the traditionally accepted ad formats.

Finally, just as a quick and hopefully fun exercise, consider this: Based on what we just discussed about content and audience, I ask you, dear reader, is this article ‘premium’?

Well, if you’re a digital marketer buying or selling media properties and you’ve read this far, I’ve hopefully inspired you to rethink how you perceive the concept of premium. Thus, it’s fair to say, based on the aforementioned definitions, this article is definitely PREMIUM CONTENT. However, if you disagree, that’s perfectly fine too, as you might not think the late Jon Lord of Deep Purple was the God of rock music either. (Sorry again, Justin.)



  • Hi Carl – thanks for the article, I agree on some things and disagree on others :). I agree that a set of properties to define premium (and certainly integrating into native experiences) is probably a good move. I disagree on the definition on Premium being purely down to YOU. If we compare display inventory to booking a hotel room, it’s obvious to everyone that Travelodge is NOT premium (sorry Travelodge – I still love you) and Hilton Hotels ARE premium. It doesn’t matter who the person is, this is understood. However some people choose to book Travelodge over Hilton and others wish there were more Hiltons in the world. Why? Many factors, but an obvious one is quality of experience. This analogy (in my opinon) applies to ad experiences, lets not make it more complicated than it needs to be. I agree Premium is a widely banded term and the purpose of Premium is probably misunderstood which is why I think a set of guidelines is probably a good move. Thanks for sharing your thoughts. Wayne

  • Petteri Vainikka, Enreach

    In all fairness towards the term ‘premium’, defining the concept – regardless of industry and/or product – is in fact very simple. And does not require any form of innovation, new thinking, or even industry wide (or trade body facilitated) consensus. Premium is – and has always been – what is transacted (regardless of the transaction mechanism) at a price premium vis-à-vis lesser valued transaction items. (This is where the term premium comes from.)

    Ad placements, formats, editorial context, audience, publisher brand equity, client relationships,… are all intricate components of what gets transacted as ‘premium’ – and for good reason. What is certain is that scarcity per se does not result in premium. Nor does full market transparency. (Although we’ve all heard sufficient argumentation for both lately.)

    Premium advertising is the result of a seller (in most cases a well known and esteemed publisher with a highly competent sales team) finding a buyer who – for any combination of reasons (rational or irrational) – agrees to pay what other (different) advertisers may think of as an unjustified price premium for having her creative message appear in the holistic advertising context of the premium publisher.

    Finally, “meat…and milk…and hotel rooms” do not actually become ‘premium’ because of any ‘grading system’, but because of market dynamics. There are consumers who a happy to pay a price premium for services/products because of some attribute(s) they feel justifies the price increment. Naturally, the marketers of these products/services do their best to secure – or create – ‘certificates of superiority’ to further accredit the ‘premiumness’ of their offerings, but it is the price actually paid by someone that defines what is premium and what is not.
    To clarify this logic with a concrete example from a market where ‘premium’ is certainly a big issue, the Médoc’s ‘Les Grands Crus classés en1855’ classification was in fact based the actual prices those now classified wines had commanded leading up until the year of the classification, i.e., wines that had sold at the highest price became the highest ranking ones in the classification; those wines that had been successfully selling at the highest price, were given Premiers Cru classé classification, those below them in price, Deuxiémes Crus, and so on.

    Price paid is the only definition of premium. Is the higher price – for a more premium product – always justified? Probably not, but this is where the human element both on the selling as well as the buying side comes in.

  • Matt Plummer

    Spot on. Think about wrist watches. I can buy a $20 watch at Target, a $100 watch at Fossil, or a $10,000 watch from Rolex. They all tell time, but something about each makes me willing (or not) to pay more.

    That 300×250 ad unit shows an ad on a “premium” site just like it does a non-premium site. But various attributes of one site make it more valuable to marketers than the other. If we want to try to call out all of those attributes, well, good luck with that.