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Publishers…Exchange Traffic, but Not for Ad Revenue

  |  May 31, 2013   |  Comments

With new technologies and products come new opportunities to manipulate our industry, so it is important that publishers are vigilant when it comes to determining the products they use.

Increasingly, publishers have come to adopt content marketing tools as a way to generate new revenue streams and/or acquire new users to their websites. Coinciding with this general trend, the "traffic exchange" space has grown significantly in the last two years, with players like MGID, Scribol, Crowd Ignite, and Knowd among the companies partnering with publishers to help grow their audience.

These traffic exchange products involve a publisher hosting a content widget that links out to related content from other publishers in the platform. In exchange for putting up this widget, the publisher gets returned visits from other participating websites. What's even better is that through optimizing content within their platforms, traffic exchanges are able to grow the pie of eyeballs by encouraging readers to consume more content than they originally intended. This creates a "multiplier effect" that typically results in returned traffic of two to three times the amount they send out. By increasing engagement, a traffic exchange can take one user from a participating website and turn her into two or three new users for other publishers in their platforms (playing on the fact that a user unique to Site A may not be to Site B).

The model is simple: pool together as many unique users around a certain demo/vertical, and in a perfect world, all participating websites market their content to that audience pool. These products give large publishers the opportunity to market their content on niche mid-tail sites, tapping into a smaller, more engaged user base, while at the same time allowing smaller publishers the opportunity to promote their content on large publications in hopes of exposing their content at scale. Simply put, think of traffic exchanges as a 2.0 version of the common link exchanges that have been around since, well, the web (except without the SEO benefit).

Now that you know the basics about how traffic exchanges work, it should seem that for a publisher looking to grow her audience it sounds like a no-brainer proposition, right? Well, sort of. While on their face traffic exchanges seem like a valuable addition to the publishing ecosystem, it is important that web publishers realize that not all traffic exchanges are alike. While there are some high-quality products that stick to the true goal of growing the userbase of all exchange participants, there are equally as many that are employing questionable strategies. These may include laundering out good traffic that publishers send into the platform to sell, returning lower quality traffic to participants in exchange…while others are just selling low-quality traffic at high premiums while hiding their sources. These practices have grown to the point where, in fact, some traffic exchanges have come under scrutiny of late, as advertisers have become increasingly skeptical of aligning with publishers who utilize certain traffic acquisition strategies.

In line with the article published by Adweek, marketers are becoming more vigilant against which audiences their advertisements are being served. This has led to some deserved, and some undeserved, scrutiny of publishers and the tools they use. While traffic exchanges have received a fair share of backlash as of late, it is important for publishers to understand that not all products are created equal. There are indeed some products that publishers need to be careful of and there are some best practices publishers can take to protect themselves from unintended "bad" traffic.

Rather than let the actions of a bad few ruin the momentum of the traffic exchange space, I think it is wiser to speak out against the questionable practices and educate the market. So let's talk about what is known.

  • Leading premium publishers, and the MBA statisticians who evaluate the quality of their traffic sources, continue to use these products and expand the placement of traffic exchange widgets on their websites. Publishers should piggyback off of their knowledge and use the products that they see on premium publishers like TMZ, Huffington Post, Meredith, Disney, MSN, Bleacher Report, and Fox News.
  • Ask the traffic exchange you work with (or the one you are thinking of working with) whether or not they work with premium advertising partners. If the traffic exchange and their publishing partners are running Google ad products on their sites, chances are that the traffic they are getting is of good quality. Since companies like Google use ad protection filters to identify bad traffic and ban websites that have a high proportion of it, it can be a safe bet.
  • Ask the traffic exchange if they audit websites before accepting them into the platform. If they are doing diligence on site traffic, chances are their exchange has a good layer of quality control.
  • Ask the traffic exchange what filters they have in place to ensure non-human traffic is eliminated from the platform.
  • Look at Alexa click-stream data, comScore cross-visiting data, and other publically available information sources to get a sense of quality of referral traffic coming into and out of the traffic exchange platform.
  • Test the traffic exchange and pay attention to the stats and the type of traffic you are receiving from them. Beyond checking to see if it is real traffic (there are some patterns to watch that can help here, but that is for another column), check to see if the traffic is quality U.S. traffic or hard to monetize traffic from some obscure region of the world.

The strategies in which publishers are acquiring and monetizing users are ever-changing. This has allowed publishers to diversify their traffic sources, and revenue, which are good things for the space. That said, with new technologies and products come new opportunities to manipulate our industry, so it is important that publishers are vigilant when it comes to determining the products they use. While traffic exchanges have the potential to bring incredible value to publishers, when considering products like these it is important that publishers ask the questions necessary to make sure that they are working with a quality partner.

Image on home page via Shutterstock.

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ABOUT THE AUTHOR

Omar Nicola

Omar Nicola serves as the Senior Director of Corporate and Business Development for Evolve Media where he oversees all business and strategy related to its Crowd Ignite division. In his role he is responsible for managing a team of 12 employees in the areas of business development, account management, and editorial. During his time he has helped grow distribution for the platform by over 400 percent to close to two billion PVs with an audience of over 15 million monthly unique users.

Working closely with company stakeholders in all divisions of Evolve (TotallyHer, Craveonline, and Springboard Video), Omar also assists in the establishment of large scale partnerships/acquisitions that drive company growth and profitability.

Prior to his tenure with Evolve, Omar held positions in a range of capacities (including finance, business development, monetization, and strategy) at Morgan Stanley, Myspace Music, Mojiva, and various digital startups/networks. Omar holds an undergraduate degree in Economics from the California State University of Northridge.

 

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