Sunday, March 14, 2010
Wednesday, March 10, 2010
- Ad networks aren't dying - the unique and value-driven will survive
- Common to popular belief, ad networks work with premium sites and often have access to the first impression during non-peak hours
- Ad networks can create channel conflict - but not all of them
Mention ad networks to someone who doesn't work for an ad network, and you're bound to get an earful -- and chances are most of it won't be positive. Publishers, many of whom use ad networks, often bash the business model because it doesn't generate enough revenue to support quality content. But the low prices for advertisers aren't always met with high praise.
Media buyers, nearly all of whom use ad networks on a regular basis, frequently give mixed reports. On the one hand, many media buyers say ad networks represent a great way to make a targeted ad buy across a lot of sites without going over budget. But those same media buyers often criticize ad networks for a lack of transparency, and in some cases they point to specific instances in which a campaign ended up on the entirely wrong site with disastrous results.
But criticizing ad networks en masse is about as useful as saying you don't like weather -- any weather. In other words, blanket criticisms of ad networks just don't make much sense.
As with any vendor, due diligence is critical. There simply is no substitute. But given the wide-ranging criticisms leveled at ad networks, we wanted to give the industry a chance to rebut some of the more common "lies" as they see them. Here's what some ad networks told us they regularly hear, and here's what they had to say about those complaints.
Ad networks are dying.
Remember a few years ago when everyone, myself included, predicted the great ad network shakeout? You know, that was back when people said things like, "Only a small handful of ad networks will survive because..."
Well, that didn't happen. And since then, those who are continuing with that narrative have adjusted the message. While no specific date has been set, the rap on ad networks these days is that they're dying, not a certain, immediate death, but a death nonetheless. Which means that if you rely on ad networks for your media buying, you better find a new strategy -- ASAP.
Well, not exactly, according to Seevast CEO Jaan Janes.
"Sure, the ad networks that have no standards and 'cookie-cutter' networks will be the dying breed," Janes says. "Those networks that are built on solid partnerships and offer results-driven technology for its advertisers and premium publishers will prevail. The ad network must offer unique selling points and a differentiation in the marketplace. The network must leverage consumer data and insights to satisfy advertisers' goals and objectives. The network must use targeting to drive a proven higher revenue return than the competition. They must do all of these things and more to be an essential part of the media buying/planning process to survive."
Only a few ad networks matter.
There are probably several hundred ad networks out there. Nobody really knows how many for sure. But one thing you often hear people say is that only the top few really matter. But that's simply not true, says Kaley Dobson, marketing manager for LookSmart.
"It's true, there are a lot of ad networks out there, and not all of them are going to flourish this year, or even five years from now, but even inevitable ad network consolidation will still leave us with more than a handful of ad networks," Dobson says. "Want proof? Look at the search advertising industry. Search networks thrive because many savvy search marketers choose to complement their existing campaigns on larger engines like Google, Yahoo, and Microsoft with supplemental campaigns on ad networks in order to expand their reach and increase their ROI. Many marketers don't want to be limited to a one-stop-shop advertising channel, and multiple ad networks provide them with the power of choice."
Ad networks only sell junk.
Want to buy inventory on a top-tier premium site? You won't be able to do it through an ad network.
That's the conventional wisdom out there -- that ad networks can only deliver inventory that lesser sites were unable to sell themselves. But nothing could be further from the truth, according to Jim Waltz, president of Traffic Marketplace.
"Almost every publisher in the comScore 500 works with top ad networks," Waltz says. And, he points out, ad networks often have access to the first impression on a premium site during non-peak hours.
Ad network traffic is unreliable.
Ad networks are no strangers to stories about dubious traffic. It simply comes with the territory. And in the early days, traffic horror stories seemed almost commonplace. But those stories usually aren't accurate -- at least not as applied to the industry as a whole, says Steve O'Brien, VP of marketing at Click Forensics.
According to O'Brien, many of those stories stem from a perception that ad networks buy and sell traffic amongst themselves, which often results in a very murky picture for their clients. But that shell game -- which might benefit a handful of shady ad networks in the short-run -- isn't standard across the industry, says O'Brien, who adds that, "Most credible ad networks have internal quality standards and controls to filter/block poor traffic from advertisers. Ad networks hate underperforming traffic almost as much as advertisers do!"
Transparency is unavailable.
One of the earliest knocks on ad networks was that they didn't offer transparency to their clients. Naturally, this criticism was compounded by the fact that there were -- and still are -- a number of so-called "blind" ad networks. While the terms vary a little, the general idea is that buyers won't know exactly where their ads will end up. But when speaking about ad networks in general, Andy Smith, VP of Marchex, says the industry, driven by media buyer demand, has gone a long way toward improving transparency.
"When working with ad networks, advertisers and agencies have become increasingly more focused on transparency and ROI," Smith says. "[Many ad networks] offer site-specific targeting for advertisers and agencies, giving them full transparency into the placement of their ads. With full transparency down to the page level, brand advertisers can protect their brand image by controlling the placement of their ads while only paying when a consumer clicks on their advertisement."
Ad networks create channel conflict.
File this one under the heading of "sometimes." In a nutshell, there's a school of thought that says ad networks create a conflict in a given channel because they undercut the price of the inventory. That is, advertisers often decline to buy directly from the publisher when they know they can hold off and pick up the same inventory for less by working with an ad network. While that might be true in some instances, it isn't true for at least one type of ad network, says Ben Cohen, director of sales for the ZEDO Ad Network.
Here's why: "Some ad networks sell only behavioral and DMA targeting," Cohen says. "They don't sell sites, so advertisers can't buy impressions from a site -- at any price"
In other words, ad networks that sell based on technology innovations like behavioral or geo-targeting aren't really selling an impression that can be bought elsewhere because the advertiser didn't buy an impression from a specific site -- they bought a user at a specific site (or sites) based on a predetermined set of criteria.
Ad networks -- like the weather -- are an inescapable reality, and just as there are all kinds of weather, there are all kinds of ad networks. Heaping complaints on ad networks for existing might be fun cocktail conversation, but in practice, those statements don't get you very far.
Even more worrisome is the possibility that many of those complaints might only be valid as to a specific ad network, but inaccurate as to the rest of the industry. That might be bad news for the ad networks, but it might also be bad news for those in digital who shy away from them because of bad information. After all, if you're steering clear of a particular type of resource because you've bought into some bad information, there's a distinct possibility that you're missing an opportunity.