Commentary

How To Evaluate A Network Buy

As online advertising continues to explode and more and more companies seek to move their offline ad dollars online, the need for effective spending increases as well. One common solution is the use of advertising networks. Marketers have long recognized the value networks can provide, but the same force that is driving marketers to networks--cost--can prevent them from maximizing the value of their network ad spending. Focusing on price is a wrong-headed, short-sighted approach, because all networks are not created equal.

As online advertising grows, so does the number of networks and the nuances that distinguish them. To get the maximum value for their network buy, marketers must look at all the aspects of the network and concentrate on which offers the best combination that will meet their objectives. Let's take a look at the many factors that marketers should consider when choosing a network.

Price. Price is usually the No. 1 concern of marketers, and rightly so if it is looked at in the context of ROI. After all, marketers are judged on how well they can use their budgets. But this has grown complicated because of different pricing models-from standard CPM (cost per thousand impressions) to newer CPC (cost per click) and CPA (cost per action) models. Price should only be one factor when determining what networks to buy.

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Reach. After price, marketers like to look at a network's reach because typically they are using a network to gain cost efficiency while reaching a large audience. Most quality networks will boast hundreds or thousands of sites where marketers can reach their audience. Marketers need to pay close attention to details of reach, such as the relationship between sites and impressions and the number of unique monthly individuals. There's a big difference between delivering, say, 1 million impressions to 100 million people on 1,000 sites and delivering the same number of impressions to 1 million people on 10,000 sites--and each could be the right choice for different marketers depending in the objectives of their campaign.

Transparency. Some networks have a representation-type model based on telling marketers exactly what sites their ads will run on, and how often. This can be especially relevant to marketers with sensitive products or offerings--think pharmaceuticals--or to marketers who want to make sure that their ads do not appear anywhere near specific types of content, such as adult or gambling sites. For other marketers, the content may not be an issue at all because they want to go as broad as possible and saturate the online landscape with their brand. In that case, are they paying for transparency they don't care about?

Value Measurement. Some networks pay more attention to measuring back-end results against the spend. Other networks concentrate on making sure marketers spend their budget the correct way up front. It is always advised that marketers work with a network to optimize their campaign throughout the duration, to ensure that the buy is maximized at every possible opportunity and not just based on one metric.

Audience Composition. How is the audience of the network created? If the network is created through several partners, the operator doing the selling may not have a very good idea of who the audience is. Some network have a very good idea of the audience because their of value in targeting specific subsets of people--whether through demographics, behavioral targeting or other means. Other networks have more premium publishers included than others, which can make them more desirable to certain brand marketers..

The Quality Evaluation. It can be easy for marketers to lose sight of all this when trying to get the best deal. That's why many marketers fall back on one easily understood metric, like price. But the examples above should make it clear that this is not an apples-to-apples game and those who treat it as such will wind up decreasing the value that a network can provide. While this is critical to a marketer's success, it is really the responsibility of the network operators to educate appropriately.

Think about this like buying a car. If you were to go car shopping, and asked a Hyundai, a Jeep dealer and a Porsche dealer how much their cars cost, you would select the Hyundai because it cost less. If you're looking for a solid but unspectacular everyday car, it would be the right choice. However if you are planning on doing a lot of off-roading or taking speedy weekend drives through mountain switchbacks, it's clearly the wrong choice despite its low cost. You need to start with, "here's what I'm trying to achieve with this buy." Only after that conversation is complete should you move to price.

By sitting down and communicating goals and ideas, and collaborating with each other, marketers, agencies and networks can create strategic partnerships that will enhance the value each receives from the relationship. By taking the smart approach, and considering every network as a unique entity, marketers will maximize the value of their advertising, regardless of the network they choose.

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