We wanted reader feedback… and we sure got it! The floodgates opened and the mail came pouring in when we asked for input on ad sales firms from sellers, buyers, and publishers.
Ad sales networks and rep firms wrote in large numbers to express frustration. Sellers by and large verified that site publishers need to honestly evaluate their audience’s advertiser appeal before expecting unrealistic results from their sales firm.
Site publishers wrote in large numbers, too, with stories of uncommunicative ad networks, revenue projections missed by miles, ad serving and reporting problems, and a general frustration with their sales firms. More than one questioned our use of the term “partner” when talking about ad sales outsourcers.
We also heard from buyers at ad agencies and client-side marketers. Though many ad buyers spoke of the networks as a time-efficient way to buy online media, others expressed concern that bundled inventory makes it difficult to know how individual sites really perform.
We’re sorry that we can’t answer all of the emails individually. But over the course of the next few weeks, we hope to address the main issues arising from the way this ad sales marketplace is shaping up. So keep those cards and letters coming!
A Market Overview
In the old days of Internet advertising (way back in the 1990s), there were ad networks that handled name-brand sites on an exclusive basis (that is, the sites agreed to sell all of their inventory through the network). Other networks carried lesser-known sites on a nonexclusive basis (the site had the option to offer some share of the inventory through the network and sell the rest themselves). There were other cuts, but from a publisher’s perspective, this was the major differentiator.
Today, while the exclusive vs. nonexclusive factor is still critical to publishers, most ad sales networks have offerings in each camp, so that factor does not help to differentiate among sales firms.
Because performance pricing has become more important, some have suggested that the key distinguishing factor is whether the firm sells on a CPM basis or on some variant of cost per performance. While we agree that pricing models matter, we’d suggest that this differentiator is more important from the buyer’s point of view than from the site publisher’s. As a publisher, you need to know if the sales partner can maximize revenue to your site, and different sites will do better with different pricing models (depending on audience behavior patterns).
Equally important to publishers is the value being built around their brands. Does the sales firm actively promote the brand name to advertisers to build momentum for future sales, name recognition, and brand awareness? Or is the packaging of sites so dominant that the advertising buyer associates success with the sales firm more than with the site whose audience is sold?
Finally, how effectively does the sales firm utilize technology to maximize revenue back to the publisher, to utilize available inventory to the best advantage, and to serve ads only where they will generate revenue for the publisher? How well are the internal systems set up to meet the publisher’s yield management, ad serving, and ad reporting needs? How well does the communication work, in both directions?
These three criteria, then — revenue maximization, branding potential, and technology/systems — will make up the framework with which we will be looking at ad sales partnerships. Every rep firm and network has a different way of addressing each of these issues, and understanding those differences has a lot to do with a how satisfied the parties will ultimately be with the ongoing sales partnership.