Debate over the value of third party ad networks is raging once again -- sparked anew by some recent assertions that ad networks reduce the value of publisher inventory.
But all the current discussion is really missing the point. The debate assumes that a direct sales model vs. a network sales model is an either/or decision for publishers. The fact is, the two have a longstanding symbiotic relationship.
In truth, ad networks (the good ones, anyway) sell something quite distinct from what publisher sales teams -- and even the newer vertical networks -- sell. Ad networks offer publishers the opportunity to contribute inventory and audiences which are monetized in a way that best meets the objectives of the ad network's advertisers, without guarantees of site placement or specific allocation of inventory in a reserved fashion.
Unlike publishers, networks sell broad reach across an aggregation of thousands of publisher sites, allowing ads to be directed at specific audiences within the network. That kind of reach and scale are simply not what individual publishers are all about -- just as third party networks can't offer front-page placement on a specific publisher page. To ensure that their unsold inventory is monetized and revenue is optimized, most publishers benefit from a mix of the two models. And the same goes for advertisers, who want single-site buys for some objectives and network buys for others.
Leading ad networks have long worked in partnership with publishers' in-house sales teams -- providing specialized strategies and tools for monetizing unsold inventory only. That is the relationship ad networks were built upon and that is why they remain a critical resource for so many publishers. Arguing direct sales vs. network sales doesn't really capture the way this online advertising ecosystem works. It is not apples to apples. Nor is it apples to pork bellies.
Far from competing with publisher sales organizations, the best networks work closely and collaboratively with their publisher counterparts to eliminate any possibility of cannibalism or brand erosion. The largest and most flexible networks will tailor solutions to publishers' needs, blocking specific ads, ad categories and creative types according to publisher requirements. For advertisers, ad networks offer a way to achieve both direct and branding goals across a wide array of sites. And this is done with a level of measurability and accountability that sets online advertising apart from other media.
Aside from the competition issue, another faulty assumption within the debate is that when inventory is put in the hands of an ad network, it becomes completely generic, losing its linkage to the publisher brand and its unique value.
The solutions that networks offer are not centered around the brand value of the individual properties across the network. However, since ad networks are able to leverage technology and audience to derive value, each property in a network performs differently based on the network's and the advertiser's objectives. In this environment, the value of publisher inventory in the context of an ad network can vary tremendously depending upon the publisher property.
As with most controversies in the world of ad networks, it all comes down to quality. Working with a quality ad network, most publishers and advertisers will thrive with a mix of direct sales and network-based solutions. If your inventory is being treated like a commodity, you are simply working with the wrong network.
David Jacobs is SVP, publisher services, Platform-A.
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