Wednesday, January 16, 2008

Ad network transparency

For all that has been written and said about ad network transparency, it's surprising how often the misconception still arises that networks do not provide transparency. In fact, nothing could be further from the truth, at least with some networks.

Perhaps the confusion is because transparency takes different forms. To illustrate the degrees of transparency offered by networks, and why these different tiers are necessary, it's helpful to review the role of networks and how they deliver their inventory.

Ad networks were built to deliver performance and scale, not to sell individual sites. And while it's beneficial that most networks have adapted to advertisers' need for transparency, they were initially created to deliver audiences in ways that would help marketers reach a specific performance objective.

Most networks can provide an extremely high degree of transparency; however, as a general rule, more transparency comes at a higher cost. To better understand where the trade-offs related to transparency begin and end, look at how a network structures its relationships with publishers and the value proposition this creates.

Author notes: Matthew Boyd is senior vice president at ValueClick Media. Read full bio.

Networks that offer exclusive site representation provide marketers with unique sponsorships, site takeovers and other custom opportunities on sites that are a match for their desired brand association or target audience. This offers the highest degree of transparency, but typically at higher rates and reduced reach.

From a publisher's perspective, exclusive representation is a great way to leverage the national sales force offered by a network when it may have a small sales team -- or no sales, ad operations or technology organization at all. The site and its network partner are highly motivated to be as transparent as possible, letting well-matched advertisers know they will bend over backward to create programs to maximize how an advertiser is featured on the site.

Key take-aways:

  • Exclusive representation provides highly custom opportunities, but with limited reach and at a higher cost.
  • The very nature of exclusive representation requires transparency between publisher, the network representing them and the advertiser.

Another level of transparency is created when a network serves as the exclusive third-party sales representative for a site's inventory. In this instance, a site may sell some portion of its inventory directly but will rely heavily on one network to fill the remaining inventory at as high a rate as possible. To the extent that a site will allow its name to be used transparently, it can earn more because the sales organization can disclose the name to advertisers who would place a value on having that site be part of the plan.

On the other hand, because the site maintains its own sales staff, it must work out how to manage any potential channel conflict with the network that is selling alongside them. This may include agreeing on a protected account list, territory restrictions or prohibiting endemic advertisers. Regardless, whether or not to disclose a third-party exclusive relationship is up to the publisher, but it is typically in the best interest of the publisher to allow their network partner to name the site.

Key take-away:

  • When a network serves as the exclusive third-party representative of a site, it is to the advantage of the publisher to allow transparency so the unique opportunities on the site can be presented to advertisers.

Some sites will give permission for a network to name them as part of a site list or on a custom media plan, but not to the point where the network will report out specific statistics such as impressions, clicks or actions. For advertisers that require full transparency from a network, this form of representation provides the site name and aggregate statistics for the campaign with individual site metrics by anonymous site identification. In all cases, the advertiser is guaranteed to not run outside a list of approved sites.

This category of representation has become quite popular recently, as it seems to be an acceptable win-win for both advertisers and publishers in working with a network. Advertisers get to run on a transparent, approved list of sites, and publishers maintain their brand and rate integrity. If being on a specific site or having specific site metrics by site name is more important than overall performance and scale, advertisers should work directly with the site. The value proposition for networks is to deliver both brand and direct response performance with maximum scale.

Key take-away:

  • Disclosed sites can be named on a site list but actual campaign statistics for individual sites are typically reported anonymously.
  • Advertisers are assured of not running outside the list of disclosed sites, while publishers are able to maintain brand and rate integrity.

A blind site is one that a network does not have permission to name, mostly because the site has made a decision that its rate card and/or brand equity would be compromised by its disclosure as part of a network. In this instance, the quality of the site may be quite high, as most of its inventory is likely sold directly, by an internal sales team. The site accepts that it will receive a lower rate from the network by not being disclosed, but has made the strategic decision to sell its available inventory at a lower rate rather than not selling it all.

Caveat emptor! The only other reason an individual site would not be disclosed as part of a network is due to poor quality inventory maintained by the network. Quality of content is subjective, but even if a site contains user-generated content or other content that would be objectionable to some, it should be categorized as such by a network in ways that allow advertisers to make their own decision as to whether they care to run within that inventory.

Key take-away:

  • In cases where a reputable network cannot disclose the name of a site, it is typically because the site has its own sales force and sells a majority of their inventory directly to similar advertisers.
  • Advertisers should select a network partner with a spotless reputation when sites cannot be named to ensure that these sites will still meet a strict quality standard.

In this day and age of online advertising, and understanding what it takes to earn the trust and budget of an advertiser, it is surprising that some networks continue to push the envelope on unapproved or inappropriate content. Advertisers should choose their network partners cautiously and ensure they have a strong track record of operating with integrity.

Underscoring the entire transparency debate is the issue of credibility, trust and selecting an ad network partner you know will always make the right decision for your brand, even in your absence. A credible partner will give you as much transparency as you require, whether that means their entire site list or a custom media plan of named sites.

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