The Ad Network – A Publisher’s Best Friend?

The Ad Network – A Publisher’s Best Friend?

In the digital advertising spectrum, Ad Networks are often associated with a type of business that is no good. Frankly speaking, they have rightfully earned this negative association.

In our young industry, standardization hasn’t always been available. As such, throughout the years, we have witnessed several “shenanigans” by Ad Networks. From the “auto download valley” to various types of click fraud, we have seen it all.

And surprisingly, for many years, no one seemed to care too much. After all, the revenues were coming in; agencies were spending their brand dollars; and publishers were only starting to master the digital advertising space. Therefore, Ad Networks cropped up like mushrooms after the rain as a convenient solution.

In recent years, a few trends started to evolve:

  1. The industry that was very tech driven to start with became even tech savvier. Tech players developed automated media-buying solutions throughout the value chain. This enabled agencies to use demand-side platforms to access supply-side platforms with a data
    layer on top – or what we like to refer to as “Programmatic Buying.”
  2. Video and Mobile became the main revenue growth engines, taking the lion’s share of budgets that were previously given to Print and Linear Television advertising.
  3. Big companies started consolidating the very fragmented ecosystem, forcing standardization on all players.From AOL buying (and later being bought by Verizon), through Yahoo buying Brightroll, Facebook buying Liverail (and I haven’t even mentioned Google yet!) – all of the major players in the industry are looking to surround agencies with a 360 solution to compete for their dollars.

So where does this leave the world of Ad Networks? We’ll get back to this question later.

The central question that we should be asking ourselves is: Where do these trends find the publisher? And in my eyes, the answer in most cases is: unprepared.

Here is why:

  • In just a few years, publishers have seen their users shift from 99% desktop to 50% mobile-oriented.
  • Publisher homepages have moved from carrying 100% display ads to 70% video ads.
  • Publishers that used to sell 100% of their inventory direct are seeing 65% of the same inventory being sold programmatically.
  • Publishers that used to sell MPUs at $20 CPM are asked to deliver high-impact ads against data KPIs.
  • Publishers are asked increasingly more often to provide “make goods” because of low viewability and ad blocking discrepancies.

These rapid changes occurring over a very short period of time are forcing publishers to deal with anything but creating content and, essentially, “being a publisher.”

Ad-ops are playing a major role in publisher organizations. Technologies such as “header bidding” drive the revenues. Additionally, a sales force that was previously used to close “cold call deals” is now learning how to facilitate “raising star deals” through “Programmatic direct” solutions.

Publishers often feel helpless in light of agency demands and the overarching technological vendors becoming a standard for every ad campaign.

And here is where I want to go back to the question I asked earlier: Where does all of this leave Ad Networks?

For Ad Networks that knew to pivot at the right time, this certainly provides a huge opportunity.

The global ecosystem is shifting towards value, tangible results, demographic metrics and first-party data that will slowly become the new terminology of the ad world.

Publishers are looking for partners that can empower them in front of agencies and technological vendors. Only Ad Networks with close publisher bonds and a strong partnership will reap the benefits of the new status quo. Meanwhile, others that remain stuck in the old game will slowly disappear or be forced to consolidate with major players.

We are seeing Ad Networks change their name and pitch every day now, but, rather, it is their place on the value chain that will determine their success in the long run.

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