No-Cost Network Aggregation May Not Be Panacea

We've become accustomed to the notion of "one-stop shopping": We can get our socks where we get our soda, and tennis rackets are located just a few aisles away from potato chips. Extremely convenient and often price-advantageous, the superstore phenomenon thrives and successful chains are often the envy of many other businesses.

Another scenario: You're at the car wash (the kind where you need to get out of your car) and you're watching the miracle happening on the other side of the glass. As you're walking, through you think to yourself, "Hey - I could use one of those air fresheners. And maybe a windshield cleaner. They have everything here that I need for my car, all in one place." And so it goes.

Consumer behaviors, of course, often fail to translate well into B2B strategies. Consider the growing trend of video ad networks that offer a technology solution that promises to aggregate video ad fill from that network and also from other networks -- many times at no cost to the publisher. From the publisher's standpoint it may sound like a panacea - increased fill of unsold video inventory, only one system to manage, and in some cases, the ability to optimize by CPM.



In practice, though, there could be potential challenges with this approach. Fundamentally, some networks may be unwilling to integrate their tags and/or assets into a competitor's system. Some of these solutions enable the publisher to optimize campaigns by CPM (among other factors). Some networks may consider the CPMs they pay publishers to be highly proprietary, and not something they'd want their competitors to see. Even if reasonable steps are taken to ensure that the "media" side of the business doesn't see information culled from the "technology" side of the business, networks may be uncomfortable with this level of detail being trafficked into a competitor's infrastructure.

Fortunately, alternatives exist in the "independent" aggregators of sales channels - those companies which provide aggregation and optimization technology, but do not also sell media. In the display world, these include yield optimizers such as AdMeld and the Rubicon Project. These companies provide publishers with an opportunity to maximize ad fill at best-possible CPMs, without the potential downside of some networks being unwilling to integrate. Of course, unlike their ad network counterparts, these systems are generally not free to the publisher. However, the cost of the system generally represents a small percentage of the media revenue that it manages.

Ad networks will likely continue to provide free ad management services, often in return for the ability to sell into the inventory. While these free systems may seem attractive, publishers should consider the potential pitfalls of one-stop shopping, and may wish to instead choose a third party who is not interested in selling their ad space, only in helping to manage it.

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