Glam sent out notice on Friday that it would stop paying their guaranteed flat rate for unsold inventory. For online ad industry insiders, Glam has always been looked at with an of eye of befuddlement. Glam’s business model which was basically to buy up remnant inventory from a network of publishers who overindexed women (meaning a higher percentage of women visited those sites vs. the average). Buying up remnant inventory has long been the play for ad networks, but what made Glam unique was that were essentially signing up to guaranteed contracts where they would pay essentially premium non-remnant rates for remnant inventory – essentially paying $2-4 CPM’s for inventory that most publishers would have been happy to sell for $.25 to $.50 CPM’s. It wouldn’t have been so bad except Glam was buying up all the remnant traffic at higher then market rates. To a publisher seeing their remnant value go from $.25 to $3 was something that sounded almost too to be true.
No one was really questioning Glam’s desire to brand their remnant ad network as the premium online channel/category for reaching women online offering access to important demo with the reach only networks can provide. What everyone was wondering was when the house of cards would collapse – you just can’t pay $3 for what everyone else was buying for $.25. Publishers (and I know a half dozen personally) were all waiting for the house to fall and Friday it did.
It’s hard to turn something that the market values at $.25 into something someone wants at $3. Glam has been trying and seems to have hit the same wall that publishers hit when selling direct – for whatever reason high quality sites with a decent brand and strong community often can sell 30% of their inventory at premium (essentially retail) rates and leaving the rest as remnant (wholesale rates). Glam’s publishers had it good for awhile, but as they say if it sounds to good to be true in the end it often is.