HotHouse makes brands work for people online

Online ad networks offer advertisers and agencies a host of options for getting their message out to a wide audience. If you’re looking for to learn more than what we’ve been talking about this month, here are a few places you can go for in-depth info about ad networks:

• New York-based digital media investment bank De Silva and Phillips has produced a white paper called “Online Ad Networks: Monetizing the Long Tail.”

• The Interactive Advertising Networks of Australia: formed specifically to develop, promote and advance Australian interactive advertising networks, publishes locally-based information about online ad networks.

• The DigiWrite blog has an informative primer on ad networks, pointing out that “ad networks to not compete with agencies. We work with many agencies to make their lives easier.”

• The Lies, Damned Lies blog offers a very comprehensive explanation of how ad networks work, including plenty of diagrams for the visually-oriented.

Online ad networks need to change to survive future digital audiences

Are online advertising networks a good thing or a bad thing? It depends on who you talk to. Many experts say ad networks help large portals and small sites alike unload excess inventory, while others say the rates paid on ad networks are so low they are killing the industry.

Some people are particularly passionate in their views. David Koretz, CEO of collaboration software company Blue Tie, says that “ad networks are for idiots”. He calls them “a tax on lazy publishers. They are a cancer that slowly eats away at you from the inside, doing severe damage even though you feel fine. They are a cancer that has spread to nearly every publisher, and threaten to do irreversible damage to our industry.”

The problem, he says, is that, “We are slaves to the short-term need to make the quarter; addicts who take the revenue boost despite the pain we will endure later.”

Working under the assumption that the average premium publisher only sells 30% of its inventory direct (which is backed up by research), he accuses publishers of using ‘bad math’ to fill the other 70 per cent.

“If a publisher sells the entire 70% of remnant inventory through ad networks, that is equivalent to selling 0.93% more inventory direct. Less than 1%!” He recommends instead that they “Figure out how to sell an incremental 0.93% as premium by innovating, not by betting the farm.”

Koretz is specifically referring to blind networks. Blind ad networks offer low pricing to direct marketers in exchange for those marketers relinquishing control over where their ads will run. Rock bottom prices (CPMs – costs per thousand page views – are measured in cents rather than dollars) are achieved through large bulk buys of typically remnant inventory combined with campaign optimization and ad targeting technology.

In a blind advertising network, advertisers get either limited or no information about what webpage their ad is shown on and where on the page it is shown. While advertisers save substantial sums of money, it’s practically impossible to measure ad effectiveness.

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Simon van Wyk talks to Australian online advertising expert David Holmes, managing director of APAC Digital, about the present and the future of ad networks and exchanges. David says that despite the increasing use of technology to achieve targeting goals, “Using salespeople adds value to the process of selling online advertising.” He talks to Simon about the difference between difference kinds of ad networks and defines common but confusing acronyms. Listen to the podcast below.

 

 HotHouse Podcast: David Holmes [33:23m]: Play Now | Play in Popup | Download