Commentary

The Vilification Of Ad Networks: Fair or Not?

Recently, AppNexus and LiveRail made headlines announcing they were excluding ad networks and resellers from their platforms. The surprise was not that these two platforms, among others, had made this decision.  Instead, I was taken aback at how vociferously industry veterans applauded all ad networks as unnecessary middlemen.

It’s true that some ad networks have employed sketchy, black-box media arbitrage, adding unnecessary mark-ups to digital ad pricing while also increasing the level of poor quality-- if not outright fraudulent-- inventory.  Nevertheless, there are still plenty of honest and efficient players who actually facilitate transactions in the mutual good interest of publishers and brands.  So while I laud many ad-tech companies for pivoting from a network-based model to more of a platform-centric approach, this hot trend shouldn’t be considered as a blanket condemnation of, and a call for the forced obsolescence of, the network business.  

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Many good-guy ad networks have found their lives have gotten harder, since they are now met with default skepticism from the likes of investors, advertisers and fellow ad-tech vendors.  The disdain of that last subset is rather hypocritical if you think about it.  Aren’t supply-side and demand-side platforms, exchanges, marketplaces, et al all middle layers too?  

One could easily look at those folks as point solutions with limited value, marking up digital ad pricing by layering in fees to both buyers and sellers.  Their contribution to the marketplace is marred by their pixels larding the transactional supply chain, causing latency-in-ad-loading problems contributing to consumers adopting ad blockers en masse, scaring the bejeezus out of the industry.   

Yet I haven’t seen any outcry or media attention focused on the shortcomings of the platforms, exchanges and other so-called critical middle layers of the digital ecosystem.  There’s significant value in terms of technology and content solutions and scale for advertisers there, but so many ad networks add similar value to the ecosystem too by focusing on things--albeit less-technical and sexy-- like aggregating inventory to generate volume to raise CPMs for many smaller pubs under one umbrella, something such pubs could not do on their own.

It’s a strategy the likes of BlogHer, Media.net, Complex Media and many others seem to execute quite well.  Simple inventory aggregation seems like added value that is tough to criticize, especially in an age when audience extension for players like the Washington Post is lauded as innovative.  Because when you get right down to it, it’s a large publisher acting essentially as an ad network by using programmatic to buy inventory from third-party sites and exchanges, repackage it and sell to the Post's advertiser clients at a premium. I doubt I’ll be reading headlines about these kinds of publishers being booted (as buyers or sellers) from exchanges any time soon.

In digital media, like all industries, we know there are bad players, some of which are networks.  At the same time, however, the reality is, for various reasons, there are also crappy publishers, advertisers, platforms and exchanges. So instead of painting everyone with the same brush, let's exercise judicial restraint and keep an open but uncompromising mind.  In this way, we might have a better chance to collectively weed out the bad apples from the players who provide value

3 comments about "The Vilification Of Ad Networks: Fair or Not?".
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  1. Shailin Dhar from Method Media Intellgience, March 18, 2016 at 4:23 p.m.

    I sort of agree with this sentiment.


    But, I'd like to hear examples of the multiple ad-networks you mentioned actually "...facilitate transactions in the mutual good interest of publishers and brands."

    What mutual good interest can ad-networks offer now that it's so easy from exchanges to be directly partnered with publishers?


    Truly asking out of curiousity, not argumentatively. 

  2. Loren Wilson from Answer Media, March 18, 2016 at 6:57 p.m.

    Aggregating volume is a service that provides value. Yahoo, for example, works with "middle layers" to get access to smaller, quality publishers for their paid search feed. They benefit from not messing with thousands of small guys and still getting the marketshare (partners have made up nearly 55% of their search network in the past), publishers get access to a valuable monetization product and the middle layers run a nice business. Publishers, and the smaller publishers especially, aren't always able to be innovative when it comes to monetization.  When a network can be successful in aggregating volume it can often times lead to better deals with exchanges and advertisers, which allows publishers to focus on what they do well like write great content and attract an audience. The YouTube MCN model is a great example. It can be win-win-win.

  3. Benny Radjasa from Armonix Digital, Inc. replied, March 18, 2016 at 7:19 p.m.

    Some examples:  BrideClick, Tripple Lift, GDN, etc

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