What to consider before working with an ad network
Ad networks are often a good way for media companies to sell out their online display inventory, but publishers who can't control ad networks face a slippery slope of lost revenue.
An increase in publisher tools, advertising exchanges and publisher-led vertical ad networks are making ad networks more manageable. But for many media companies, working with ad networks can still be a daunting task with no cheat sheet (at least, I haven't found one). Over the last few months, I've collected a variety of insights from online advertising executives about what publishers should know before partnering with an ad network. The end of this post includes a checklist of questions to ask ad network providers.
Should you work with an ad network?
Working with an ad network isn't for everyone. Some publishers, like technology publishers Ziff Davis and IDG, fill enough of their inventory that they are not looking for help from secondary markets such as ad networks.
“To a good extent we have the luxury of not having to work with networks because we do a pretty good job of covering the market and filling our inventory on our own,” Bennett Zucker, senior vice president and general manager of data solutions at Ziff Davis, said in a phone interview.
Peter Longo, CEO of IDG Syndication and Networks, pointed out that even for publishers with undersold ad inventory, working with ad networks is not always worthwhile. Publishers risk lowering the market value of their inventory by selling some of it through secondary channels (sort of like selling your designer clothes for a discount on Amazon and expecting people to buy the same item at a higher price in the store).
“What you have to weigh is: What's the value of that excess inventory versus the value of your brand?” Longo said at the Publishing Business Conference & Expo in April.
For publishers that do want to use a network, Longo recommends considering a partner that specializes in the publisher's particular vertical (IDG runs its own). Another option: bypass ad networks altogether and go straight to an ad exchange, where the publisher can set its own floor prices.
“Try to find the right partner," said Longo. "Don't just go out there and chase that dollar.”
Choose partners wisely
Before working with an ad network, publishers should decide what their objectives are, Alysson TeCarr, director of publisher development at TRAFFIQ, a media planning and buying platform, said in an email. She suggested two questions to help publishers determine their goals for an ad network:
Are you just looking for fill or are you looking for a strategic partner that will diversify your exposure?
Who are the network's biggest advertisers and what are they buying? (Ask to see case studies.)
TeCarr also explains how CPMs can be deceiving in regards to ad networks:
"Many networks will tout high CPMs to edge out the competition, but it’s not only the CPM that matters, it’s the fill rate. An ad network may promise you $5 CPMs, but it’s the eCPM, or 'effective' CPM that matters most. For example, if you have 1 million monthly impressions to sell and your network partner sells 1 percent of your impressions at a $10 CPM, that’s only netting the publisher $100/month. On the other hand, if your ad network sells 25 percent of those impressions at a $5 CPM, you’re earning $1,250 per month."
Consider sell-side platforms
Ad networks get bad press for audience data collection — one of the hot topics of the year. Publishers must understand what data third-party ad networks are collecting from their websites — and take steps to protect audience data they don't wish to share.
“One of the things that is both exciting and challenging for publishers is the question of data: who owns the data and where the line is drawn,” said Ryan Polley, senior vice president of strategic development at Mpire Inc., which provides AdXpose, an advertising analytics solution. “There’s definitely been a lot of conversation at events I’ve attended and in the webisphere around ad networks taking data that doesn’t necessarily belong to them and reusing that to extend their own audience.
“If I were a publisher, I would make sure I have the tools in place that enable me to understand what data is being collected before networks advertise on my site,” Polley said.
Sell-side platforms and tools have emerged to help publishers filter and manage ad networks to, among other things, protect audience data. (Choosing which of these platforms to work with is a topic for a separate article.) One such platform is PubMatic, which works with many of the large, premium publishers.
Eric Klotz, vice president of marketing at PubMatic, said the media buying landscape is moving to a seller's market, or in the publisher's favor.
“When publishers choose partners today, they should be thinking about what that partner will look like in the future and whether or not that partner will enable them to meet the advertiser demands of the future,” he said in an email. “Our ecosystem moves way too fast for publishers to rely on partners that are not building their technology and services for a marketplace that will look completely different in three years.”
Preserve ad quality
Malware and bad ads aren't as big of a problem anymore, as publishers have learned to put controls in place. But protecting your brand from subquality inventory remains something publishers need to watch out for when working with ad networks.
“Brand safety is a big concern,” said TeCarr. “When networks are selling buckets of inventory on exchanges, or farming out inventory to large third-party aggregators, the quality of ads can go down.”
For example, “daisy-chaining” of ads occurs when one ad inventory is passed from network to network, potentially causing an irrelevant ad to pop. To avoid this, it's a good idea to set up a default ad network or house ad when inventory can't be filled, explained Zucker. “Make sure you have something in place: a house ad or whatever, because otherwise you might wind up being handed off to the next ad network."
What to ask your ad network
Before working with an ad network, publishers should make sure they read the fine print. Julia Casale-Amorim, chief marketing officer at Casale Media, an ad network that works closely with publishers, offered a checklist of questions publishers should ask:
Assure advertiser quality and control
What degree of pre-emptive control do I have over the advertisers/campaigns eligible to run on my site/bid on my inventory?
What mechanisms are in place for assuring the quality of ad creative delivered to my site?
What is your quality assurance process?
Can you provide pre-emptive assurances that advertising adheres to our quality standards and specifications?
Mitigate channel conflict
Can buyers access site level delivery/performance reporting?
What type of information is disclosed to advertisers up front?
What data is collected from my site/audience and how is it used?
How much of my inventory are you able to fill? What guarantees can you offer?
Protect inventory value
What control do I have over the rate at which my inventory is purchased?
How can I be sure that my inventory is represented fairly in the marketplace?