KnowVertical Blog

Online Advertising Networks/Methods...

When you are building a vertical ad network it will be important to understand the remnant networks that your publisher partners will have relationships with.  In most cases for the smaller sites these remnant programs will be the backbone of their website revenue.  You can always let your partner sites participate in their current remnant relationships, or you can go cut your own remnant deal.  Finding the right remnant advertising network to use on your network is critical.

We have compiled a reasonbly comprehensive list of most of the major advertising networks. Below you will find a list of advertising networks offering CPC, CPM and CPA campaigns. These networks are listed according to their major advertising methods, and their position doesn't reflect quality or payout.

This list is by no means a comprehensive list of all the advertising and affilliate networks out there, but it should provide you with a good starting point to see which of the networks will work the best for your site.

CPC: Cost per click - the cost or cost-equivalent paid per click-through. You get paid each time a visitor clicks on one of your advertisements. The revenue generated from the click will vary according the maximum bid of the advertiser or ad network.

- Google Adsense
- Yahoo Publisher Network (Beta)
- Chitika
- BidClix
- BannerBoxes
- Adbrite
- AdSonar
- Clicksor

CPM:Cost per thousand impressions - You get paid a certain amount each time a visitor views one of your pages. CPM is indicated as a certain payout for a 1000 impressions. If an ad campaign has a eCPM of $1.00 you will get paid $1.00 for every 1000 impressions.

- Tribal Fusion
- FastClick
- Casale Media
- BurstMedia
- RealTechNetwork
- ValueClick
- Buds Ad Network
- MaxOnline
- 24/7 Real Media
- Bannerconnect
- Mamma Media Solutions
- Adtegrity
- Ad pepper Media
- Rightmedia.com
- Advertising.com
- Accelerator Media
- AdSmart
- AdAgency1
- Interclick

CPA/CPLCost per Action - model in which payment is based solely on qualifying actions such as sales or registrations. Your visitors must complete a certain action after clicking on the ad. This varies from buying a product or registering for newsletters.

- Linkshare
- Commission Junction
- ShareASale
- WebSponsors
- Advertising.com
- Azoogle Ads
- Maxbounty

Each of these service their own market.  Though they are all broad category focused networks looking mostly at Direct Response optimization, they are potentially great partners to assist you in building out your network. 

Network Profile: TopDog Network

Finally, here is a great example of the granularity and direct nature of Web 2.0 expanding into online  advertising; beyond another social networking site. Today ‘The Net Version II’ is all about direct connections, visitor generated content, openness, and user control. These same cornerstones of the next generation have not translated to the online advertising world, until now.

Top Dog Ad Network launched this weekend with little fanfare. With the official launch, there is a cool new website up and a little press pick-up. But the real story is not the site; it is the groundbreaking nature of this new advertising service. Top Dog has a very unique market strategy that could portend the future of interactive advertising.

Top Dog is an interactive rep firm, serving and focusing on a segment that even two years ago would have been considered a minuscule niche market... the world of dog-lovers. But the story does not end there; it further breaks up this valuable category into sub-niches such as Dog Trainers, Boarding, Books, and more. The taxonomy was clearly built to address the market make-up and advertiser demands.

What makes this groundbreaking is that it is a network that was developed in the model of the market. It is extremely granular and extends the dogs-tail of the web. Additionally, the additional value is that Top Dog is offering it services on top of the open and transparent advertising platform, Adify. Sitting on top of the Adify platform really provides the power to both the buyers and sellers.

If Top Dog publishers are unhappy they can simply flick a switch and either sell everything through their own storefront or switch to another network. Their only “customer lock-in” is apparently the quality of the service itself.

This is the first of many sub-niche ad plays that will really bring online advertising into the 21st century.

Yet Another Case for the Vertical Network...

If you really need a case for why to build a vertical ad network, recently there was a study released that should lock up the decision for you.  Put down the magic 8-ball, file the ROI and P&L analyses; stop hiding under your desk.  Take a look at some of these recent stats from Collective Media in their recent study.

Collective Media, a leading online advertising network, today announced key findings from its 2007 Ad Network Study... Findings show that ad networks are gaining in popularity not only among direct marketers, but with brand advertisers as a complement to online publishers and portals.

Collective Media conducted its analysis of more than 100 U.S. agency and advertiser respondents.  The objective was to identify major trends in the use of online ad networks among interactive agencies and advertisers.

Key Findings:

• 66% of advertisers plan to increase their usage of ad networks in 2007
• 88% of respondents planning to use online ad networks in 2007 (up from 77% in 2006)
• Over 57% of respondents believed how an ad network targets audiences was the #1 differentiating factor
• Reach (at 52%) and Efficiency (at 66%) were still the key drivers for why agencies/advertisers include ad networks on the buy
• When analyzing why agencies/advertisers limit their use of ad networks, editorial control was the biggest barrier at 59%

For a copy of Collective’s 2007 Ad Network Study, please email Collective Media at contactus@collective-media.com. 

If you break these stats down a level deeper, what you should take out of this study is the following:

1. Advertisers want to buy across the small and fragmented sites on the web
2. They are frustrated with having to deal with the big blind ad networks, and want to deal with people they trust
3. Agencies want to have control over where their ads are displayed and they want to trust that the content is high quality
4. Brand advertisers are scared to use networks that are not transparent and are an unknown entity

Money is flowing into networks, and if you offer a solution to solve the agency/advertisers concerns they will spend their ad budgets with you.  It is important to realize that the big blind ad network is not the ultimate solution.  Getting a cold call from another unknown generic ad network is just making the media buyers life more complicated. 

The solution is in consolidation of the high quality websites and blogs within specific categories.  These vertical networks need to be very specific within a given category/vertical and must be transparent and provide full control to the buyer.

Finally, larger publishers have an advantage in the fact that they have established relationships with the big brand buyers.  This will go a long way in making the media buyers life much easier.  That is what this study was about, how these networks can help the media buyers be better and more efficient, without having to take risks.

The Vertical Ad Network is the solution for many of their sleepless nights.

Others Thoughts: Why? Why? Why?

Andrew Chen has put together a great posting on the reasons to build a vertical advertising network and some of the areas of consideration if you are going to build from scratch, such as Glam Media did years ago. 

Of all the postings in this space, he has done a great job of pulling out some of the real issues and benefits associated with entrepreneurs building a vertical ad network.  Many times there is a focus on the larger media players and how they are working on grabbing as much quality land as possible, while keeping focus.  Andrew has taken a slight twist to this view.

When you're an ad network upstart, by far the hardest problem is the chicken-and-the-egg problem. To have a happily functioning ecosystem, you need publisher ad inventory and advertisers that want to buy it - but neither set of parties will come to the table without the other. 

Of course the goals and objectives of an entrepreneur versus a large traditional media company are much different when it comes to building an ad network, but there are a set of issues that are consistent across both types of network builders.

Andrew's post digs into the concept of building value from the ground up and the problems that a non-publisher will face as they build out their network.  Some of the areas he points out include:

• Starting a network without a property can become painful.
• Not being transparent in what advertisers are buying can really cause problems.
• Management of channel conflict across high quality sites can only get more difficult over time.
• Networks will continue to have to be creative on how they go to market.

On top of his summary of the situation, he does touch on something that is a real issue today with Glam.  Andrew drills into the problem of growth...

The first is that advertisers may think that they are buying inventory on Glam-quality sites, and may not approve if the umbrella gets too big or the standards are too lax.

It does appear that Glam is changing their focus and thus is potentially going down a slippery slope.

The impact is yet to be seen.  Read Andrew's Posting on Futuristic Play Blog

The Big Blind Problem…

First there was the blind ad network.  These networks were created to help sell unsold advertising for each and every publisher out in the market, regardless of size.  These players served an important purpose, which was mostly the idea of scale within a sales organization.

The sales organizations didn’t work for most companies because of the cost and overhead to sell online advertising.  A sales person would have to call on ten to fifteen advertisers to get one to buy.  The cost of serving the ads (aka the bandwidth) was out of this world.  The cost for a midsized ad server (digital box) could cost over $50,000 and never recoup the investment.

The idea behind the ad network was to provide a sales team that could package up the inventory and  sell it across the advertiser base.  These sales people would sell a consolidation of sites, which to the buyer of the day was the best thing.  Most buyers had not bought online and were just trying to test new ways to establish their brand or build a business.   The ad network served a great purpose for all parties involved.

These blind ad networks started out not being too blind.  They were more of a sales channel than anything else.  The problem was when the sites began to grow and more advertisers were interested in spending online.   Bigger sites were not getting their ad sales teams out pitching the online (interactive) solution and it was starting to pickup.

The problem came in when a sales person for Yahoo! was pitching a buy at $8 per thousand impressions, and the network was selling the same inventory at .50 per thousand impressions.  Imagine what the outcome was.

Finally these networks had to become more and more ‘blind’ to the buyer. 

These networks served their purpose in the mid-90 and even into the early 2000’s.  But why are these blind ad networks so big and important today?  The economics have changed, the cost of serving ads have changed dramatically, and there are agencies out there dedicated to buying online.   

The reason these guys have gotten bigger and fatter is because of need for immediate gratification along with the laziness of the agencies.   Publishers are hooked on the revenue, and though every data point in the world suggests that removal of lower end remnant advertising on your site has a long term positive effect, many publishers are too hooked on the short-term gains. 

Additionally, agencies are under pressure to deliver to their clients.   They are being told to spend more and to reach more consumers.   The easy way out is to call a big blind ad network and you have accomplished what your client wanted with very little work. 

There are repercussions to this approach and the publishers and agencies that are smart about how to manage their remnant will win in the end.  It is a long road, but they will win.