4 ways to run your own vertical ad network

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The only thing potentially more valuable than a publisher's own audience is a network of audiences with similar interests. That's the logic behind vertical ad networks, which have enabled publishers to band together ― even with competitors ― in order to get more value from ad inventory than they would from horizontal networks. 

A few vertical network models have emerged from publishers in both consumer and business media. Here's how IDG, The Economist, New York Media and Healthline Networks are extending and targeting their ad inventory to other publishers in their respective segments. 
 

Extending audience 

A few years ago, B2B technology publisher IDG observed a fragmentation of its audience across an ever-growing crop of technology websites. “We decided to co-op them into an ad network,” Peter Longo, CEO of IDG Syndication and Network, said at the Publisher Business Conference & Expo last month. 
 
What started as a two-person project grew into about 45-employee operation that will top $20 million in revenue by the end of the second quarter, Longo said. A quarter into its third full year, the network has 450 publishers and generates an excess of 1 billion page views a month. 
 
“If you're in a vertical category and you're in either a trade space or a vertical consumer space where you know that market pretty well, chances are you can be the lead dog when you launch your ad network,” Longo said.
 
The program faced a few hurdles in the last year as advertising technology advanced to buy specific audiences. “Everything was going along swimmingly for us until ad exchanges became something we had to deal with,” he said. In response, the publisher launched the Tech Media Exchange, which adds real-time bidding and audience buying to the mix. 
 

Aggregating ideas

The Economist added a twist to the vertical network format. Like IDG, The Economist has comfortably found itself in a consistently sold-out position with ad inventory. But it doesn't buy into regular audience buying. 
 
“Our motto is people, not cookies,” said Ron Diorio, vice president, product and community development for The Economist Online, speaking at PBCE. That's the concept behind the Ideas People Channel, launched last year and marketed as “a branding platform to deliver an elite audience at scale.”
 
The Economist spent a year researching what its audience reads in order to build  a network of publishers. The network aggregates an audience by psychographic affiliation (basically, they round up like-minded readers).
 
Diorio said the publisher now benefits from advertisers that previously weren't able to afford the directly sold inventory on The Economist's site. Another benefit, he noted, is that psychographic targeting doesn't face the same privacy concerns of cookie targeting. “[It] may also be for smaller publishers one way to protect themselves from unneeded privacy misery,” he said.  
 
Ideas People Channel
 

Choosing content partners 

In the entertainment vertical, New York Media launched a network around its popular Vulture blog earlier this year. The network extends advertising campaigns from the blog to other like-minded entertainment sites ― utilizing the purest form of good-old-fashioned contextual targeting. 
 
In an interview earlier this year, Ron Stokes, executive director of digital ad sales at New York Media, explained the network's hands-on approach to selecting partners in line with the Vulture brand. Websites are actually vetted by the editorial team to be impactful in the culture space.
 
“We'll continue to grow Vulture itself and will continue to evaluate partners ― we've got a waiting list of partners that want in,” he said. 
 

Sharing technology 

If horizontal ad networks are on one end and consortium-oriented networks (like New York Media) are on the other end, then the Healthline Media Network sits in the middle. 
 
Healthline Networks, a provider of health information services, runs an advertising network in the health information category. In March, the company reported that the network had grown by more than 50 percent since 2009, reaching more than 43 million unique vistors every month (or 43 percent of all health information seekers). 
 
Healthline's juice is a technology called HealthSTAT, which scans the content of a page to contextually target the right ad. For instance, in the health and pharmaceutical space, advertisers want to reach a high percentage of people inflicted with a specific condition, explained David Kopp, SVP, consumer media, Healthline Networks, Inc., in a phone interview. 
 
Publishers end up leveraging the same technology in order to serve relevant ads. It also provides a uniformity for targeting in those industries. In addition to extending audiences like many vertical ad networks today, Healthline is an example of how publishers can share common technology and practices.
 
“Our publishers don't have to have made a billion dollar investment in building that sort of contextually targeting technology,” Kopp said. 

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