In the column preceding last week's, I wrote about the lack of meaningful innovation that I saw at Ad: Tech. In that column, I had mentioned that there were some companies that demonstrated very cool ideas within proven models. Within the idiom of transparency therefore, let's talk about the ad network.
One writer correctly reminded me in my weekend reading that Burst's network has been transparent from the start, and that Tribal and other large networks have been as well--my mistake in not mentioning those. I also was reminded of one of the announcements I noticed at Ad: Tech the week before. This one, from BlueLithium, described their network's behavioral targeting capabilities, which sounded a lot like adding a fairly robust performance capability to a pretty cool behavioral targeting product.
That's all fine and well. But, BlueLithium has another innovation that really caught my attention. While their AdPath product for advertisers enables remarketing to targeted audiences, the AdPath version for publishers actually enables publishers to sell across the network themselves.
Like most other networks, BlueLithium is in the business of arbitrage. The company buys inventory as low as it can and then sells it as high as it can through various packaging and optimization strategies. Many publishers are correctly wary of arbitrage, since it can obviously commoditize their offering and even put downward pressure on their pricing. That's why networks primarily sell inventory on lower-tiered sites, because enough sites below the top 300 or so can't even afford having their own sales forces in the first place.
But, BlueLithium claims that 70 of the top 100 sites, in terms of unique users, are on their network. They also claim that publishers have vigorously embraced the ability to sell across their network, with no opposition. Each of these sites certainly has its own hungry sales force.
Yield management is a larger problem for high-volume publishers than it is for low-volume ones. The announcement last fall that some of the largest sites on the Web were sold out through Christmas may have read like good news. But the more strategic among us saw the inherent problem of salespeople sitting around, and ad dollars being spent elsewhere. Perhaps BlueLithium is on to something here that goes far beyond the value of their network.
According to the company, AdPath for Publishers creates an "extended audience" by tracking a publisher's readership as they visit other sites across the Web. This creates a new revenue stream, as publishers can autonomously sell this extended audience inventory to their own advertisers. AdPath for Publishers has a proven and secure technology that does not collect or retain any personal information and does not require any additional software installations.
Obviously, that last point is an important one. I doubt that more than a few publishers will remain sanguine over the fullness of time about competing publishers' selling their eyeballs. After all, that sort of seems to cut right into the commoditization idea. Advertising.com provides a similar service as well, so it's not as though this is a brand-new idea.
As for what it means for the transparency that advertisers will increasingly be subject to? If networks can facilitate easy reports across their inventory and manage payouts seamlessly, advertisers will be cognizant of where their brands appear, where the action was taken, and who sold the inventory along the long tail. It makes for some seriously long invoices, I suppose, but it sounds like an idea worth exploring nonetheless. Good for them.
While we're on the topic of human innovation, another--albeit unrelated--human innovation I'd like to applaud is the addition of Max Kalehoff to the Spin Stable. Welcome, Max!