The Right Media Model

Transparency in ad networks is an ongoing trend in interactive media. So wrote my colleague Hollis Thomases, and she’s absolutely right. Increasingly, publishers are doing more than just recognizing the value media buyers and planners place on knowing where their ads go. They’re rescinding their once-ironclad policies and pulling back the curtain to better align with their clients’ needs.

Given we media strategists always have advertisers’ best interests in mind, it’s tempting to think we’re the only ones who benefit from a transparent approach. Try telling that to a publisher, who’s equally vested in knowing as much as possible about the marketers buying its inventory, particularly when it’s obtained through an ad network.

The street runs both ways, as they say. The middle of the street houses an open exchange of information for the mutual benefit and financial advantage of marketers, advertisers, and publishers alike.

Some big players live in the center of the street. Earlier this year, Google provided a new AdWords report that allows advertisers to see exactly where ads are placed within its content network. This followed the announcement that Yahoo had purchased Right Media, an online ad exchange built on the concept of open and aboveboard media buying and selling.

As an auction-based exchange with over 20,000 participants and more than 5 billion transactions made daily, Right Media tries to offer something for everyone. Advertiser Media Exchange (AMX) lets advertisers pick and choose inventory and manage buys (including ad serving, if desired) on a single auction-based platform. There are products for publishers and ad networks too; Publisher Media Exchange (PMX) is designed for selling sites’ non-premium inventory, while the Network Media Exchange (NMX) facilitates real-time bidding on a network’s publisher impressions, a process that sites within the network can manage directly.

In an industry that prides itself on candor but isn’t fully equipped to deliver it, Yahoo’s investment in a company like Right Media is poised to pay off. Our investment could, too. As much as ad networks try to appease marketers by banishing banner blindness and opening up their site lists, many can’t fully do so under their current business models.

It’s all a matter of determining what a network buy has to offer and how it delivers on that promise. For a direct response advertiser, for example, much of a traditional network buy’s appeal involves the reach and pricing, and it’s largely the number of combined impressions available that allows networks to keep prices low.

In a situation like this, a buyer has to expect inventory will be drawn from a large pool of sites, some more recognizable than others. The opportunity to weed through these sites could result in a pared-down list that would reduce available impressions and drive up prices, reducing the potential ROI (define) and defeating the purpose of the direct-response campaign buy.

Openly revealing a network’s list can, of course, also result in sales conflicts for ad network publishers. Publishers commonly prefer to have their involvement with third-party ad sellers hidden, as it could affect their first-party agreements with other sales channels or dilute the value of their premium inventory rates.

Most specialty and niche networks don’t operate in quite this same way. Because they work with fewer sites, each of which has been dutifully selected based on the quality of its content, audience, and size (specialty networks tend to strictly enforce their partnership requirements), it doesn’t take as much for them to reveal all, nor is it as likely to affect a media buy.

So while in a perfect world we’d always know where our clients’ ads are running, we must recognize it isn’t always an option. When candor is a must, it’s nice to know there’s more than one place that guarantees an open exchange of information.

While services like Right Media’s will increasingly find their way into media buyers’ processes, the right media model for advertisers and publishers will always include some traditional ad network buys, blind placements, and all. It’s our job to determine if and when it’s appropriate for our specific clients, and roll on from there.