• by Joe Apprendi , Op-Ed Contributor, July 15, 2008

The online advertising market certainly loves controversy. This was never more apparent following highly visible announcements by ESPN, CBS Sports and Turner Networks that they have severed relationships with third-party ad networks. And in Turner's case, what makes this more interesting is that they share the same parent company, Time Warner, together with Advertising.com.

So, where is this headed? For the last two years, ad networks have been basking in the limelight on both the media and investment front, benefiting from the favorable seismic shifts in ad spending and skyrocketing valuations. Some would argue that the market was ripe for a little contrarian news like this. From my standpoint, it was about time.

The ad network phenomenon has gained amazing momentum, thrusting an innumerable number of players with seemingly low differentiation into the fray. Ad networks are also popping up in a lot of different varieties lately: ad exchange, vertical, video, contextual, performance, premium, portal and even ad network solutions to manage multiple ad networks. From a brand-name publisher's perspective, with so many choices, choosing the right partner(s) is proving to be confusing and often a challenge. And picking the wrong path or partner, could do more damage than good.

Top publishers have far more complex considerations when deciding the right ad network partner. In fact, CPM yield customarily is not first on the list. Unlike long-tail sites or large user-generated content properties (with less stringent advertising guidelines), these publishers have to first and foremost protect their brand, audience and direct sales channel. An incremental $1.00 eCPM on unsold inventory if not carefully monitored and controlled cannot offset the damage resulting from the wrong ad running on their site causing user and advertiser complaints or the misrepresentation of their ad inventory at an important agency because of one careless ad network salesperson.

So, how do premium publishers capitalize on the growing popularity of ad networks and the shift from site-specific to audience-centric media buying? In addition to launching your own proprietary vertical ad network, here are a few recommendations to help you pick the right ad network partner(s) and avoid the wrong one(s):

1. Limit number of ad networks: This reduces sales conflicts, ad rotation issues and overall ad operations time. This also lifts CPM yield by eliminating advertiser overlap across multiple ad networks.

2. Differentiate product: Create a true 'apples vs. oranges' approach. You sell and report on your site, as well offer high value placements such as sponsorships. Your ad network(s) should be selling target audiences across its network and not sell or report on specific sites.

3. Complement your sales channel: Look for ad networks to complement and not compete with your direct sales team. Clearly communicate to your sales team what your ad network partner is selling vs. what they are selling. This gets everyone on same page (internally and externally) and limits confusion.

4. Set advertising guidelines: Be clear with your ad network(s), let them know what ad categories you don't accept (direct competitors, lead generation, gambling, etc.). However, try to limit block lists as often the same advertiser has different initiatives, some tailored to higher priced sponsorships vs. more efficient audience buys. This will maximize your yield.

5. Ask for transparency: Request 100% transparency on advertisers and their ads with the right to accept or decline based on your specific guidelines and block lists. Be sure to demo their reporting interface in advance to see if you get the information you need for proper monitoring and billing.

However you as a brand-name publisher navigates this opportunity, it's clear that unsold ad inventory will continue to be 30-70% of your available ad impressions. The real question is "how" best to maximize value, not "if" you should. While the ad network players have changed, the ad revenue game remains the same. Perhaps, it's time to look beyond the most likely suspects and pursue an alternative game plan.