The Three-Ring Media Buying Circus: Beware the Carnivores

P.T. Barnum is know for having said “There’s a sucker born every minute.” (Though he didn’t actually coin the saying, he certainly did business as though he believed it.)

P.T. is back, this time in the new wave of Internet advertising. As we recover from dot-com crap, the same brokers are still selling the same scams.

It’s bad enough to be scammed the first time, as most ad buyers were in the early days. Paying customer acquisition costs of $40 to $250 cost per thousand (CPM) meant you didn’t care about results in your rush toward the initial public offering (IPO). Those days are over, but bad practices are not. Try to place your affiliate ads on other sites through a hybrid deal — part CPM, part performance — and you’ll find price insanity is alive and well.

You think you’re working with normal companies. Then, you find you’re not in the center ring but among the denizens of the sideshow, and they’re selling some God-awful, run-of-network ad.

Buying ads online should be fairly simple: You give them your ad, pay for space (OK, you negotiate like crazy here), and see if it works. Right?

In today’s market, nothing is further from the truth. The old days of CPM haunt us in the guise of ad brokers and servers designed to deliver quantity, not quality.

In the media buying three-ring circus, you need to know the cast of characters.

Ring 1: The Grifters (AKA, the Ad Brokers)

Since 1996, when buying banners became a hobby for businesses (468 x 60 banners don’t work in terms of sales), brokers have been coming out of the woodwork.

The most successful ones from those days love to relate how their mission was to ruin dot-coms. Despite dramatic changes in the industry since then, they adhere to practices you need to be aware of:

• They sell ad volume, not results. That’s not news. They now have a wide variety of bad ad inventory for sale. Before, it was standard banners. Now, there are pops, spam “opt-in” email lists, and bigger ads on the page that cost even more.
• Brokers want you to buy rich media ads because they cost more — even if they are too hard to implement at a broader level.
• Brokers want you to think they are connected. Pick up the phone and call virtually any site. Make your own deal. You’ll probably do better on your own.
• When a broker hears you have a brand-name client, the price goes north. I recently had a site bid $7 CPM for skyscraper banners. When they learned who my client was, the price was suddenly $28 CPM for the same deal.

Ring 2: Ad Servers and Three-Card Monte

Ad servers are like the three-card monte street scam in which a dealer shows you a card, lays it down with two others on a table and challenges you to find the first card. The hands move quicker than the eye. You never pick the right card.

The same thing happens when you try to view the ads you paid for:

• You want impressions that are actually seen by eyeballs. Many ad servers, including DoubleClick, count an impression as a request for an ad from the server. When a search engine bot or a spider hits a site or someone hits the stop button on her browser, that’s still a request. A request doesn’t mean anyone saw your ad. You could be losing 30 percent of your ad buy if it’s measured by request instead of fully delivered impressions.
• The same people see your ad multiple times. Fine for branding, but for sales you want unique impressions (see my last article). These are unique viewers who see the ad once a day. You then know the number of people who saw the ad, the clicks, and the ratio of those who ended up buying.
• With an affiliate program, you likely have all the sales tracking you want. Can this be tracked through other servers? Be careful. Most ad servers use a single pixel graphic to track. Your affiliate program probably works on the same principle. Your tracking and the affiliate’s tracking will often disagree. Few understand this, and it can cost plenty of money. Be sure to test your ads before committing your dollars on the affiliate’s network.

Ring 3: You

You play a role in this three-ring circus — an important one. Most affiliate programs, and media buyers in general, have no idea how complex they can make things. Poorly coded ads are sent out at the last minute. Affiliates scream at the brokers, who scream at the publishing site, which blames the ad server… you get the picture.

Test your own advertising and tracking all the way to an order to make sure it works. Few people do. Media buying was centered on 468 x 60 banners because they are easy to distribute. Give me the ad, I chuck it on my server, we see what happens. It rarely, if ever, is that easy.

The sensible approach to online media buying is adopting this attitude: Be amazed when anything works. Meanwhile, watch closely to see what’s not working.

Marketing is a game of small numbers; a two percent conversion ratio is a huge success with a raw list. To play the numbers game, you need to watch the numbers. Don’t get caught up in the carnival sideshow of brokers, ad servers, and people like you trying to figure out how it all works.

The spirit of P.T. Barnum is alive and well in Internet advertising, and he’s looking for his next sucker. If he doesn’t find you, there are many more unaware media buyers down the road. There’s one born every minute. So take some time to understand how the circus really works.