Web publishers have a long, tangled history with ad networks. Many newspapers and magazines rely on them to sell off unsold advertising online, but at the same time, they resent the networks for dragging down the value of their overall inventory.

Today in the Wall Street Journal, the ad network slamming continues. In an article about a new study by the Online Publishers Association, the paper subheads their story with the following: "Proprietary Content Is Better Channel Than Portals or 'Ad Networks'."

The implication is that advertisers are better off buying online ads through publishers than through those lowly ad networks. It may be in the best interest of publishers (like the Wall Street Journal) to slam networks and encourage advertisers to purchase their ads directly. But it isn't an either or situation. Publishers are giving ad networks inventory they can't sell on their own. These "remnant" ads are by default cheaper ad content. And smart advertisers are buying both.

According to the Wall Street Journal:

"The Online Publishers Association -- which represents creators of Web content such as New York Times Co., ESPN.com, MSNBC.com and The Wall Street Journal -- on Thursday is releasing a study that finds that ads appearing on the portals and bought through ad brokers are significantly less effective than the premium ads they sell on their own sites."

A study commissioned by publishers is unsurprising going to promote their ads, and this one found that ad networks provided advertisers with the smallest change in ad effectiveness, including no change in purchase intent. In addition, online ad awareness metrics were 21% greater for ads on content sites than overall MarketNorms and portals, and 50% more than ad networks.

Here's where those comparisons get problematic. Publishers specifically reserve premium content for their own ad sales teams. When they can't sell ads in house, they get shipped off to an ad network. Those ads, that are often linked to less popular pages and sections, are by default less valuable than premium ads on the homepage or customized skins in locations where advertisers are looking for brand identification.

That doesn't mean ad networks are useless. And comparisons like this are flawed:

"The study shows, for instance, that online ad awareness metrics -- where consumers remember seeing a brand or product advertised on the Web in the past 30 days -- was 21% greater for ads on content sites than portals and 50% greater than ads placed in bulk by ad brokers."

Even if advertisers get more value from premium ads purchased directly through publishers, this ignores the simple fact that without ad networks and exchanges, much inventory on these sites would go completely unsold, resulting in 0% ad awareness.

"It’s nearly impossible for a well-trafficked site to sell all their inventory," says John Ardis, VP of corporate strategy at ad network ValueClick today. "They cherry pick their best stuff, and then send the rest out. There’s not a magic formula, but the notion that you should abandon networks is outdated."

Finally, the Journal article gets to this point with a quote from Steve Kerho, senior vice president of analytics at digital ad agency Organic:

"You go to media conferences, and there is a portal contingent, there is an [ad network] contingent. Sometimes I feel like saying to all of them, can't we just get along? You all have a place at the table."

Meghan Keane

Published 13 August, 2009 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Comments (1)


Jay Stevens

Great post. I agree with John from ValueClick,  it’s extremely difficult for any well-trafficked site to effectively sell all their inventory. There is a reason why the appetite for ad network optimization services has exploded in the last year. Many publishers are realizing how difficult it is to efficiently  manage their direct sales teams and the multiple ad network relationships to fully optimize their inventory.

Currently, roughly 80% of online advertising goes unsold (directly) and that 80% is what’s sent to ad networks to monetize. If a premium publisher isn’t using ad networks  to monetize their unsold inventory, they are losing out on a significant amount of revenue. The online advertising industry is a 65 billion dollar industry, there is plenty of money to go around for everyone – direct sales teams, ad networks and exchanges. Bottom line, premium ads may make more money for publishers, but collectively publishers are leaving money on the table if they aren’t monetizing their unsold inventory and the only way to do that is to rely on ad networks.  

almost 9 years ago

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