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Making money with ad networks requires constant vigilance
By Adolfo Mendez | Editor
With online advertising networks constantly evolving, one of the best actions a newspaper can take is to designate someone on staff to keep up with the trends.
That’s one of the recommendations from the Medill Management Center at Northwestern University. In a recently released study, the MMC noted that ad networks can pay off, but only if they’re carefully monitored.
The authors of the report, “Online Ad Networks: Disruption—and Opportunity—for Media Businesses,” note that there are literally hundreds of ad network options available to newspapers.
An ad network manager can monitor a paper’s network affiliations and handle the communications with them, according to Rich Gordon, director of New Communities at the MMC and the report’s project manager and editor. Gordon also heads Digital Innovation for Northwestern’s Medill School of Journalism. Scott Anderson, former content manager at Tribune Interactive was the lead author of the report along with Michael A. Silver, executive director of The Newspaper Consortium, a joint venture of nearly 40 major newspaper companies representing nearly 800 newspapers. Silver worked on the study during his previous job at Tribune Co.
Follow the money
Identifying potential partnerships in the ad network market begins by fully understanding your own site, Gordon said. Publishers need to understand where they receive a lot of traffic as well as where ad demand is high or low and then, with this data, use ad networks to fill in space they’re not filling with ads.
“You need to know who you can’t reach in terms of your advertising base,” Gordon said. “Who you think you can sell more to.”
Newspapers should know what selling advantage they have in the local marketplace to determine “who really isn’t likely to be a direct sales opportunity—given your size, focus and geography,” Gordon said.
Experimentation is a major part of the process. For example, consider creating premium advertising opportunities for advertisers willing to pay high CPMs and “think long and hard” before adding ad positions.
“Some say it’s better to create fewer positions and sell more,” Gordon said. “Jupiter Research says don’t just create inventory, create solutions for your advertisers.”
To succeed, media companies need to be flexible. “You need to be constantly looking at your rate card or be willing to adjust your rates based on demand,” Gordon said.
Advertising sales staff initially encounter a steep learning curve, but one thing is certain: newspapers can make more money selling their Web inventory than outsourcing to a network, because networks are usually interested in buying at the cheapest rates possible, Gordon said.
More tips
One way to assess whether an ad network is worthwhile is to see what other newspapers have embraced them. “Try to understand what networks they’re using,” Gordon said. “Maybe this will help you narrow down a list of networks that you want to think about.”
In addition, newspapers might want to make sure that certain advertisers don’t circumvent the paper by using an ad network to advertise cheaply on the paper’s Web site. It’s important when negotiating with ad network representatives that they are able to prevent them and other advertisers from appearing on your site. “You don’t want your core advertisers to be able to buy your site too cheaply,” Gordon said.
Carefully monitoring the networks includes conducting regular “inspections,” he added. “If you’re getting serious about a potential network affiliation, inspect the goods,” he said. “Are these ads you would want on your site? Are they misleading to the user?” Gordon said. “Is the network adhering to its own stated standards?”
To avoid a bad partnership with network affiliations, publishers need to know in advance how much inventory they’re willing to give and at what price. “Leave some inventory for internal promotions,” Gordon said. “Don’t give it all up to the networks.”
Privacy issues
The study notes that behind ad networks is “increasingly sophisticated software” that can serve up several millions of ads in less than a second based on factors such as consumer behavior or demographics. Using your IP address, the technology can determine the city you’re in and what Web page you were looking at right before and what browser you’re using. Ad networks use this basic data and much more revealing data to serve ads based on “attributes associated with the consumer, the publisher and/or the advertiser.”
Such detailed tracking of consumer’s Web habits has given rise to concerns about privacy issues, however. “I think that privacy is one of the big, unresolved questions in the future of interactive media in general,” Gordon said. “We’re all in favor of privacy, but on the other hand, we give it up online relatively quickly, at the drop of a hat.”
The concerns can lead to legislation that could curb the progress being made in targeted advertising, he said. “I think it could be politically powerful to say, ‘I’m going to stop these ad networks from tracking you on these sites,’” Gordon said. “I don’t think the average person knows that’s happening. On the other hand, if I’m a publisher I should really be interested in keeping the regulators out of this space.”
A copy of the report can be found at MediaManagementCenter.org. Visitors to the MMC site can also set up a custom Web search that permits people to search several hundred sources that the authors used in the creation of the report.
Contact: Richard Gordon, richgor@northwestern.edu
That’s one of the recommendations from the Medill Management Center at Northwestern University. In a recently released study, the MMC noted that ad networks can pay off, but only if they’re carefully monitored.
The authors of the report, “Online Ad Networks: Disruption—and Opportunity—for Media Businesses,” note that there are literally hundreds of ad network options available to newspapers.
An ad network manager can monitor a paper’s network affiliations and handle the communications with them, according to Rich Gordon, director of New Communities at the MMC and the report’s project manager and editor. Gordon also heads Digital Innovation for Northwestern’s Medill School of Journalism. Scott Anderson, former content manager at Tribune Interactive was the lead author of the report along with Michael A. Silver, executive director of The Newspaper Consortium, a joint venture of nearly 40 major newspaper companies representing nearly 800 newspapers. Silver worked on the study during his previous job at Tribune Co.
Follow the money
Identifying potential partnerships in the ad network market begins by fully understanding your own site, Gordon said. Publishers need to understand where they receive a lot of traffic as well as where ad demand is high or low and then, with this data, use ad networks to fill in space they’re not filling with ads.
“You need to know who you can’t reach in terms of your advertising base,” Gordon said. “Who you think you can sell more to.”
Newspapers should know what selling advantage they have in the local marketplace to determine “who really isn’t likely to be a direct sales opportunity—given your size, focus and geography,” Gordon said.
Experimentation is a major part of the process. For example, consider creating premium advertising opportunities for advertisers willing to pay high CPMs and “think long and hard” before adding ad positions.
“Some say it’s better to create fewer positions and sell more,” Gordon said. “Jupiter Research says don’t just create inventory, create solutions for your advertisers.”
To succeed, media companies need to be flexible. “You need to be constantly looking at your rate card or be willing to adjust your rates based on demand,” Gordon said.
Advertising sales staff initially encounter a steep learning curve, but one thing is certain: newspapers can make more money selling their Web inventory than outsourcing to a network, because networks are usually interested in buying at the cheapest rates possible, Gordon said.
More tips
One way to assess whether an ad network is worthwhile is to see what other newspapers have embraced them. “Try to understand what networks they’re using,” Gordon said. “Maybe this will help you narrow down a list of networks that you want to think about.”
In addition, newspapers might want to make sure that certain advertisers don’t circumvent the paper by using an ad network to advertise cheaply on the paper’s Web site. It’s important when negotiating with ad network representatives that they are able to prevent them and other advertisers from appearing on your site. “You don’t want your core advertisers to be able to buy your site too cheaply,” Gordon said.
Carefully monitoring the networks includes conducting regular “inspections,” he added. “If you’re getting serious about a potential network affiliation, inspect the goods,” he said. “Are these ads you would want on your site? Are they misleading to the user?” Gordon said. “Is the network adhering to its own stated standards?”
To avoid a bad partnership with network affiliations, publishers need to know in advance how much inventory they’re willing to give and at what price. “Leave some inventory for internal promotions,” Gordon said. “Don’t give it all up to the networks.”
Privacy issues
The study notes that behind ad networks is “increasingly sophisticated software” that can serve up several millions of ads in less than a second based on factors such as consumer behavior or demographics. Using your IP address, the technology can determine the city you’re in and what Web page you were looking at right before and what browser you’re using. Ad networks use this basic data and much more revealing data to serve ads based on “attributes associated with the consumer, the publisher and/or the advertiser.”
Such detailed tracking of consumer’s Web habits has given rise to concerns about privacy issues, however. “I think that privacy is one of the big, unresolved questions in the future of interactive media in general,” Gordon said. “We’re all in favor of privacy, but on the other hand, we give it up online relatively quickly, at the drop of a hat.”
The concerns can lead to legislation that could curb the progress being made in targeted advertising, he said. “I think it could be politically powerful to say, ‘I’m going to stop these ad networks from tracking you on these sites,’” Gordon said. “I don’t think the average person knows that’s happening. On the other hand, if I’m a publisher I should really be interested in keeping the regulators out of this space.”
A copy of the report can be found at MediaManagementCenter.org. Visitors to the MMC site can also set up a custom Web search that permits people to search several hundred sources that the authors used in the creation of the report.
Contact: Richard Gordon, richgor@northwestern.edu
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