• by Jeff Hirsch , February 21, 2006

Why are there ad networks? Anyone know the reason? Apparently Ari Rosenberg, author of "Just Say No to Ad Networks," does not.

The purpose of an ad network is to provide a service on both sides of the equation. For advertisers, an ad network provides buying efficiencies, cost-effectiveness, campaign management, targeting, and more via aggregating a target audience across many sites. For publishers, an ad network provides an outsourced sales solution that accesses campaigns and ad dollars they might not have access to on their own. Whether blind or transparent, ad networks create essential revenue streams without high, fixed, overhead costs. For publishers without sales forces, a network might be the sole sales solution. For publishers with sales forces, a network can fill excess supply when demand created internally is not sufficient.

The use of ad networks is clearly on the rise and an integral part of the online advertising mix. In the January 2006 Deutsche Bank Securities Internet Report, research analyst Jateel Patel clearly notes that campaign spends on ad networks expanded from 11 percent in Q3 2005 to 16 percent in the Q4 of 2005.

So let's address some of Mr. Rosenberg's points:

1. "Ad networks connect your site to less desirable creative." Should sites watch what ads run on their site? Of course. Since when did this become a network issue? Advertisers produce creative they believe will get results, and sites must determine if that ad is relevant and/or appropriate to place within their content. Every site, whether part of a network or not, needs to balance revenue generation against consumer protection. Reputable networks offer complete campaign control over ad content. Bottom line, ad networks provide results to advertisers and publishers regardless of content.

2. "Ad networks connect your site to lower prices." Should sites watch how much they make for their inventory? Absolutely. Is this only relevant when a site is part of a network? No. The same holds true with aggressive in-house salespeople who are not value selling and are merely grabbing low-hanging fruit. Media buyers are watching sites to see how much they can buy inventory for? With all of the sites on the Internet, that would be a full-time job. Networks usually sell blind because they are not specifically representing your inventory, meaning that they are also not guaranteeing clearance. No experienced media buyer expects anything different. IQ test or not, if buyers wants to buy directly from a site to clear guaranteed inventory, they know they will pay a premium for it. Besides, reputable networks offer complete control over rate acceptance, ensuring publishers control over what they make for their inventory.

3. "Ad networks connect your site to diminished value." Ad networks are a service that publishers can use at their discretion, with creative control. How does this promote diminished value in any way? Reputable ad networks offer publishers easy outs and complete control.

I've been in the ad network business for almost seven years and never once have I talked about magazine classifieds or infomercials--they are not my area of expertise. Mr. Rosenberg has taken a respectable, established business model and, in my opinion, with total self-interest as an independent advertising sales rep, slammed the concept with completely irrelevant misinformation.

Ad networks provide a service. Ad networks offer advertisers true value. Ad networks offer publishers indispensable services. Completely inane editorials confuse the marketplace--how could they not?