To sell ads online, publishers and marketers are faced with a choice between aggregate ad networks or direct dealings. Our experts weigh the pros and cons of each approach.
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Rajeev Goel
Co-founder and GM, PubMatic
More than 10 years’ experience in online retail technology
As an advertiser’s needs scale up, and as a publisher’s size scales up, the best model to buy ads online changes. From a publisher perspective, it’s often not cost-effective to sell individual inventory until the publisher can support a direct sales force.
These publishers will likely start with a mix of ad networks (aggregated inventory), then possibly move to a site representation firm (mix of aggregated and individual inventory) and then eventually bring the sales function in house (individual inventory).
From an advertiser or marketer’s perspective, a small marketer can likely hand-pick a few targeted places to advertise that match well with their audience. But, as the advertising budget grows, the advertiser will likely need to work with ad networks and portals, because these organizations have the sophisticated technology required to manage reach and target better. As the advertising spend gets bigger, efficiency becomes ever more important.
In my experience, control is critical for publishers for a variety of reasons. The publisher likely has its own requirements with respect to the quality of the creative. In cases where the publisher has a direct sales force, they may need to manage channel conflict. An example of this is when an advertiser who pays a premium to buy direct tries to buy the same site for a cheaper price through an ad network.
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Allister Blanco
Director of search and analytics, LBi
Formerly held positions at 360i and NIIT USA
The objective for campaigns is to hit a goal with the available budget. Marketers must decide whether the target audience of the publisher network (aggregate) or individual Web sites (individual publishers) best fits our target audience, then consider the reach we can acquire with our allotted spend.
Marketers looking for maximum reach and competitive price should use the publisher network, while those looking for more-targeted audience segments at somewhat higher CPMs, go with the individual publishers.
Publishers should be up to speed on how a network will move their inventory and how they’ll be represented by the sales force. The amount of control you have comes when you bring unique, performing traffic to the table.
The amount of remnant inventory online from publisher networks is growing. This is a challenge as more dollars are shifted away from branding to more search-specific campaigns.
Providing case studies on how a network can meet the bottom line will also help. Collectively, we need to find a way to show this, so that the decision to buy inventory on a CPM-based model will be an easy one.
There are other factors to consider, such as past performance and client service. But, with all things equal, you are trying to spend responsibly. We’re all scrambling to get those media dollars placed in a competitive marketplace.
DMNews’ Decision
Blanco points out that spending wisely will win the best conversion at the end of the day. However, Goel says the choice is about the reach and audience a particular publisher has. In an increasingly competitive landscape knowing the motivations of both sides of the table will help campaign managers make the best decision for their audience and brand.
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