Take the mystery out of ad networks

Ad networks can be baffling, even to experienced marketers. Four industry experts clear things up by sharing the best strategies marketers can use to take advantage of this important online platform

George Simpson
CEO, George Simpson Communications

By some estimates there are nearly 400 ad networks. Too many? Perhaps, but they all are there for a reason — they provide publishers with a way to make money on the ad inventory they can’t sell themselves because they don’t have a sales staff or the sales folks can’t sell all of their own ads.

For marketers, ad networks provide a way to reach large audiences across numerous sites with a single insertion order. And, as AdMeld CEO Michael Barrett told me, “The fact is, ad networks are a key engine of growth for this industry. Every network represents one, 10, or a hundred or more salespeople selling the benefits of online advertising to agencies and advertisers, edu­cating the marketplace about optimization, reporting and results.”

Claims and counter claims by each network on its ability to reach this audi­ence or that better than the next guy leave media buyers with a dizzying number of network options. Ad exchanges can cherry-pick audiences from multiple networks. In behavior exchanges, user data is sold by publishers to enable retargeting across lots of networks.

Then, there are optimizing intermediaries such as AdMeld, which sit between pub­lishers and networks and promise to help publishers direct their inventory to the most effective and profitable networks. Even the most stalwart media buyers can be frozen with indecision.

Here are some hints for using ad net­works. Do they exclusively represent the inventory they sell? If so, they can offer more options for brands to make a bigger splash. Make sure they tell you which sites your ad will run on and prove it with post campaign reporting.

Need to reach millions of like-minded people? Then consider vertical ad networks for technology, travel planners, pet owners, kids and moms or whatever audience your product may target. L

Ad networks allow marketers to reach a large audience across a number of sites

Austin Scott
Manager, campaign and media performance, X+1

Ad networks have morphed and adapted over the years, and will continue to offer agen­cies and advertisers much needed scale and efficiency when purchasing online media.

There are many ways that ad networks can specialize their services; for example, by keeping the brand blind, by being trans­parent and through targeting. Ad networks can be categorized most easily by splitting them up into those that aggregate demand to serve the advertisers and publisher net­works that serve the media vendors.

Larger Web sites typically operate by the 80/20 rule, where a site can sell 20% of their inventory at a high CPM for pre­mium ad slots and the other 80% of the Web site’s inventory gets monetized through ad networks. The important feature of an ad network is that it is a marketplace in itself. The traditional ad network has a sales force buying bulk impressions from sites for low cost, then redistributes amongst its advertisers at a higher rate. There is a balance of managing the networks margin, the advertiser’s goals and the publisher’s revenue. The emerging ad networks are capitalizing on not owning the inventory differentiating themselves by technology, software, targeting and specialty to yield better ROI.

Advertisers want to reach the right audience and have brand objectives and/or direct response cost per action, click-through rate or cost per click metrics while avoiding unsavory content. Defining and targeting the advertiser’s audience is a great way to efficiently spend with performance. Real performance is in buying the specific audience targets for an effective cost per thousand (eCPM) rather than buying a bulk of impressions and hoping that your advertiser’s key audience in the bulk.

Recently, the traditional ad network model has been challenged by companies that align themselves with the only buyer’s side to work for the publisher’s best interest, or only on the seller’s side to work for the buyer’s best interest. Due to these recent changes in the marketplace, it has been said that the economies of scale no longer exists with ad networks.

Examine the marketplace to learn how ad networks can work best for your brand

Pete Vlastelica
CEO, Yardbarker Network

In this economy, when brand advertisers need more bang for their buck, there are some compelling reasons to partner with vertical ad networks. While an ad network is a company that connects publisher Web sites that are looking to host ads with adver­tisers who want to run them, a vertical ad network lets advertisers get more targeted by working within specific verticals such as real estate or fashion.

Vertical ad networks generally are made up of high-quality sites that produce excellent content and have loyal followings, but are too small to hire their own sales teams. They rely on a vertical network because costs per thousand (CPMs) tend to be higher than they’ve seen from the performance networks that may be their only other option.

But that’s a pretty low bar. Even after you factor in the network’s cut, the market clearing price to run on sites in a vertical network can still be four to five times lower than the rate card CPMs of big publishers. And, while a big publisher can’t afford to drop its price that low, the publishers in a vertical network are thrilled to be getting such a high CPM.

Considering the economy and the fact that Web usage is fragmenting. For example, Yahoo has 70% reach, but only 7% of total minutes online. This is a dynamic that brand advertisers should take better advantage of in 2009.

Of course, working with big publishers gives brands a level of service that most net­works don’t deliver: guaranteed placement, high-impact units, custom creative. But the best vertical networks are responding to this demand and acting more like publishers themselves by customizing campaigns that speak to their niche, offering site selection and optimization, and delivering on the promise of high-impact by deploying skins, homepage takeovers and sponsored content across hundreds of sites at once.

An easy way to test whether your network thinks like a publisher is to ask for guaran­teed placement on a select group of sites. If a network is not willing to let you pick and choose sites and where the ads will be placed, then chances are you’re not going to get the impact you’re looking for.

Vertical ad networks offer marketers the opportunity to run more targeted ads

Lindsay O’Neill
GM, Aperture

Many companies identify themselves as ad networks to capitalize on marketer demand for online ad targeting. So, how can you leverage an ad network to maximize return on your media buys?

Ad networks promise the ability to serve ads to relevant online audiences. Historically, networks aggregated display media, serving ads across a variety of contextually relevant Web sites and channels. The next wave of networks made it possible to serve ads to consumers who recently visited contextually relevant sites or behavior targeting.

The core challenge cited by brands that employed these networks was they were buying “wasted” impressions as it was likely their campaign reached individuals outside their target criteria.

For example, BMW might have reached a number of young males who subscribed to high-end automotive sites and even clicked on content relevant to the brand. However, many of those reached might not match target income criteria, and therefore those impressions were wasted.

The ability to leverage ad targeting at the household and individual level eliminates this challenge. Today’s best ad networks make it possible to build a precise audience network across all display media, either in conjunction with contextually relevant ad placements or across the Web. Employing multiple layers of data to hone in on the right online audience, empowers marketers to spend their media dollars more effectively and eliminate “wasted” impressions.

When an ad is targeted to specific house­holds vs. sites or recent activity alone, brands can now target ads based on real demographic, geographic, transactional, behavior/interest and other verified data.

In the new scenarios, BMW would place targeted media buys focused on reaching “males from age 30 to 55, who have recently visited auto-related Web sites, with a house­hold income of $75,000 or more” and pay only for impressions served to individuals that match the criteria.

With the best ad networks, you can build a precise audience across display media

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