Using Ad Networks: You Need a Plan

by: Gene De Libero | September 14, 2009 | No Comments

I came across this “note to readers” from the NY Times today:

“Some NYTimes.com readers have seen a pop-up box warning them about a virus and directing them to a site that claims to offer antivirus software. We believe this was generated by an unauthorized advertisement and are working to prevent the problem from recurring. If you see such a warning, we suggest that you not click on it. Instead, quit and restart your Web browser. Questions and comments can be sent to adtraffic@nytimes.com.”

Back in April, the New York Times announced a pretty serious revenue slide (”New York Times Ad Sales Plummet 28.4%“), so the chances of this advert being inserted into the Times’ ad rotation via one of any number of ad networks they’re working with to help fill that revenue gap is pretty good.

Ad networks are a reality for any organization with unmanaged inventory and a need to generate revenue (that description applies to most publishers on the Web, who tend to create much more inventory than they could ever sell.) But it’s important to allocate the proper resources to manage those networks. Maximizing yield is an important task, but even more important is eliminating the risk of potential negative brand impact.

If you can’t or don’t want to manage your ad networks in-house, call one of the ad network optimization companies out there, whose sole function is to aggregate hundreds of ad networks and exchanges and get you the best yield for your unsold inventory. Having to send out a message like the one above means it’s already too late. Like the folks at NYTimes.com, you’ll be in reactive mode instead of being proactive.

Using ad networks requires a plan. At the very least, you need to:

Establish realistic revenue expectations for your excess inventory.
Consider (and reconsider on a regular basis) overall pricing and inventory strategies.
Analyze the ongoing returns from the ad networks you use and continually negotiate more favorable CPMs (perhaps a flat CPM in certain instances?) or better yet, leave it to companies like AdMeld, Pubmatic or Rubicon Project to do it for you.
Understand that if you create too much inventory, impressions will most always significantly exceed demand.
Proactively and consistently work to reduce (or better, eliminate) the risk of potential negative brand impact and conflicts with your direct sales channel.

9/14/09 UPDATE: Peter Kafka’s Media Memo covers the NY Times pop-up/malware advert issue today.

9/15/09 UPDATE: NY Times runs an article that fixes blame for the unwanted advert showing up on their site(s) on an unapproved 3rd party ad server.

Because The Times thought the campaign came straight from Vonage, which has advertised on the site before, it allowed the advertiser to use an outside vendor that it had not vetted to actually deliver the ads, Ms. McNulty said. That allowed the switch to take place. “In the future, we will not allow any advertiser to use unfamiliar third-party vendors,” she said.

And in case you’re hungry for more resources regarding ad networks, enjoy these links:

Top U.S. Ad Networks, April 2009

Advertising Age Ad Network & Exchange Guide

Online Ad Networks: Monetizing the Long Tail

IAB Marketplace: Networks and Xchanges

The Truth About Ad Nets: Profit Margins of 45% To 60%

Breaking The Daisy Chain

In Defense of Ad Networks

Growing Ad Networks Shaking Up Online Ad Spend

The OREO Doctrine – The Binary Future of Online Advertising

Should agencies be ad networks?

How to respond to the ad network backlash