Just Say No To Ad Networks

by Ari Rosenberg, Feb 16, 2006, 3:45 PM

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Networking connects you to something you would not connect to if you hadn't joined the"network."  This is exactly the function ad networks perform for online publishers.  In exchange for the rights to sell their inventory, online ad networks connect online publishers to advertising revenue the publisher would not have otherwise met.   

 However, before you sign on or renew agreements with companies that harvest inventory you have grown, which includes Google--a company that appears as many things and yet most closely resembles an ad network--you should consider the money you lose with every dollar you make leasing out your inventory to a third-party seller.

 The problem you (the online publisher) choose to solve with ad networks is the issue of unsold inventory.  Too much supply is bad for business.  So you invite ad networks to vacuum up your monthly overflow and, in exchange, you split the change they find in between the seat cushions.  In addition, this monthly absorption empowers a greater sense of scarcity for your dedicated sales force to communicate, in an effort to increase CPMs for the inventory they sell.

So what are the problems with how this problem is being solved? 

1. Ad networks connect your site to less desirable creative. When are publishers going to realize ad creative is part of the picture they paint for their readers to admire?  You cannot tell me a banner or skyscraper filled with Google text links enriches the appearance of your site.  Worse, I recently alerted a friend who manages the sales of a mid-sized educational content site that a medium rectangle on his home page was promoting a site to help his readers "get laid."  He was irate and promised to fire one of the ad networks he was working with, but the damage had been done.  The ad had both offended readers and cheapened the look of his site.  How could it not?

2. Ad networks connect your site to lower prices. CPMs for inventory resold by ad networks often dip below a dollar.  Most ad networks sell "blindly," so advertisers are unaware of which sites they will appear on within a defined category.  However, media buyers are not blind; when they see an ad for Lower My Bills, Endless Pools, or an ad offering readers a chance to tease their brain with an IQ test, buyers immediately sense they can purchase inventory from your site at a lower rate.  How can they not?

3. Ad networks connect your site to diminished value. Clients buy sites blindly when purchasing inventory sold by ad networks, so how much value do they place on the quality of a site's content?  Ad networks further perpetuate the sense that unless a reader acts when seeing an ad, nothing of value has occurred.

Those who defend the practice of using ad networks will say that running these kinds of ads on your site is no different from magazines running classified ads or television stations selling infomercials.  But this argument does not hold up, because, unlike infomercials that run at odd time slots, or classified ads that run in the back of the book, online ads bought from ad networks often run in the same positions as ads bought directly from a site at higher CPMs.  Besides, infomercials and classified ads do make content properties appear cheaper.

A house with a backyard containing an overflowing dumpster, a rusted swing set and a shed so full its doors can't close will bring down the value of any neighborhood, regardless of how expensive the zip code.  Ad networks shove low-valued products into your content neighborhood, and the rent they pay will cost you far more in sales in the end.  If you don't build your revenue plan to count on ad dollars from ad networks, your site will run fewer ads. This will make your site more appealing to your readers, while increasing their attention to the ads you have sold.  How can it not?

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