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Use of "Ad Networks" Surges Six-Fold

The Interactive Advertising Bureau has released findings of a recent study stating that online publishers and websites have been placing their unsold inventory in the hands of "ad networks."

As online publishers continue to experience growth rates of 20-30% in ad revenue, the race to create new advertising opportunities has left publishers with an excess of inventory which they are selling through ad networks at up to 90% discounts versus direct sales rates.

These networks are able to acquire unsold inventory from hundreds and hundreds of premium and non-premium websites and create package deals for advertisers. Also:

“Online publishers are producing more inventory than the market demands, and risk devaluing the premium nature of their brands, particularly in light of ad networks growth and their dramatically lower pricing,” said John Frelinghuysen, a partner in Bain’s Global Media Practice and study author. “Building more effective relationships between publishers and ad networks is critical. In the longer-term, both parties will benefit from gains in ad network CPMs.”

But many advertisers want to be associated with big-name, tier 1 sites. They want the branding and the affiliation with the premium names out there. What they forget is that it's not the website that's buying their products and services, it is the actual user of the website. Chances are good that the user is visiting multiple websites during any given online session. And if it's the users you want to reach, shouldn't you focus on the sites they are actually visiting as opposed to the sites you think they'll be visiting?

Jim Meskauskas of iMedia Connection agrees:

...what needs to be understood is that the audience is what matters most-- more than where the audience is found. And if where these audiences are found are places where those audiences have chosen to be, even if it is a place you haven't heard of, what's wrong with that?

We all know that an ad in a bad place can have a negative impact. But does being on a site the advertiser is familiar with versus one it has not, so long as the audience is right, have a more positive impact?

None of this is to say that buying within ad networks is better than buying a highly branded single site. It is to say, however, that advertisers need to think more seriously about ad networks in addition to those sites.

The best thing about some of these ad networks is that they offer behavioral tracking, so when your target user moves from one site to another, the ad can follow them and show up on additional sites, whether or not the newly visited site has anything to do with the original ad. Depending on the network, you can optimize your impressions to show more on the sites that are receiving the most response.

As Meskauskas notes, it's finding a way to add networks to existing single site placements that will provide the largest gain.

A Publisher's view: Selling Online Advertising Requires Different Sales Strategy

My last post was about the challenges that nationally recognized "local" newspapers face when trying to evaluate advertising revenue in print and online.

Along somewhat similar lines, Craig McMullin, Executive Director at the Association of Free Community Papers (AFCP), provides perspective from the publishing side:

Whether publishing a newspaper or shopper, breadth of coverage has always been a key ingredient. We cover a community and we realize that our community consists of people interested in a wide variety of news and advertising information.

And, we know that if we publish a paper with a wide variety of news and/or advertising information, something in our paper is going to be of interest to each and every person in the market. It will be something different for any two people, but there's going to be a hook that engages each person and that will make them want to read my paper.

You don't know which hook brought a reader to your paper, but there was a hook somewhere. Our readership scores prove it!

And in the community paper field, our publications are small enough that you can bet nearly everyone flips through the entire paper looking at each page. That's enough to assure that ads work regardless of where they were placed.

Joe may have been interested in tires and he knows from previous experience with the Buyers Guide that he'll find tire ads, so he reads the Buyers Guide. While flipping through the pages, he sees that the local Mexican restaurant has a "kids eat free on Tuesday" promotion going. So, he finds his tires and tells his wife that the family should go out to eat next Tuesday.

It's a winning recipe and it serves us well. And, it will continue to serve us well in the future. But, outside influences are cutting into our margins and we need additional revenue to keep our businesses solid.

So, why is online cutting into our margins?

Online habits vs. print habits

People use the Internet in completely different ways than print. While Joe was looking for tires, he took the time to flip through the Buyers Guide and found an ad for a Mexican restaurant that caught his eye.

When Joe searches for tires on the Internet, he's using search tools to look for tires and only tires. He doesn't randomly flip through pages of your website to see what else is for sale. He looks for tires, makes a decision and goes about his life.

That's good for the tire guy, but not so good for the Mexican restaurant guy.

And that has a dramatic impact on how we sell advertising.

Craig points out an important point - readers searching through a print publication see ALL the ads in any particular section as they look for something specific. They may skim the ads, but they are guaranteed to at least appear on the page. Online searchers have the option of bypassing everything they are not interested in, giving them a faster search but limiting the newspaper's cross-selling abilities.

Some smaller community newspapers don't have the enhanced online capabilities of larger publishers, such as search tools, print ads appearing online, interactive features, and forums. Because of this, print ads in these newspapers are a valuable asset for local readers.


More about AFCP:

The Association of Free Community Papers was formed in 1951 to provide a forum for free paper publishers across the country to come together, share best practices, exchange ideas and build a stronger free paper industry. Since those early days, AFCP has grown to represent nearly 3,000 individual publications delivered to more than 45 million homes across the United States. AFCP also provides The National Advertising Network, Inc. (NANI), the largest national classified advertising network in the country, offering advertisers a convenient, one-stop opportunity to advertise products and services in local community papers.

To learn more about Association of Free Community Papers, click the title above, or visit www.AFCP.org.

To learn how to advertise in NANI, contact me by email or by phone toll-free at 866-612-0034 x115.

The Challenge Of Non-Local Newspaper Advertising

Scott Karp, of Publishing 2.0, presents an in-depth look at the dynamic between print and online advertising for major newspapers.

With some of the major “local” newspapers – New York Times, Washington Post, Boston Globe – becoming more and more a part of the national (and global) media scene, it would make sense that most of the advertising revenue would come through their online editions. And yet, even with online readership skyrocketing and print subscriptions dwindling, that doesn’t begin to tell the full story.

Karp says:

I’m still more valuable to the New York Times as a print subscriber than as an online reader because my advertising value is still so much higher in print — despite my not living in New York City.

Here’s the economic reality for national newspaper brands: Print readers are scarce. Online readers are a commodity.

So here’s the dilemma – print readers are declining, but are the cornerstone of the advertising revenue. There are 10x more online readers, but newspaper websites don’t offer enough value to make it worthwhile to spend the dollars online.

It also points to the value of the local newspaper allowing advertisers to pinpoint one geographic market. While the online presence of a newspaper adds searchability and ease of access, there’s something to be said about having a product that physically reaches X amount of houses in the New York City DMA.

Karp continues:

In the market for local advertising on the web, newspapers are competing with other traditional local media companies, e.g. TV station, as well as with new web-native local publishers, and with search engines — this is a newly leveled and expanded competitive landscape, but still limited.

For non-local readers, on the other hand, newspapers are competing with hundreds, even thousands of other content sites.

In any case, it’s a fascinating issue that will continue to make news (no pun intended).

Holy Bazoongas, Batman!

A clever agency over in Germany created this Wonderbra ad for a public bus stop. Obviously, creating the illusion of a larger bust size on a woman is Wonderbra's bread and butter, and it's nice to see a playful take on that when it comes to marketing. Sometimes you have to play to your strong point, or points, as the case is here.

Equally entertaining, the extra yellow safety line at the metro stations, again provided by Wonderbra. Just protecting their assets....

UPDATE:

This Wonderbra campaign is really cranking. The billboard shown below is a collage of hundreds of photos of women wearing their bras:

(courtesy of www.adrants.com and http://adweek.blogs.com/adfreak)

Community Papers Perform Well, Focus on Local News

Al Cross of the Rural Blog discusses the reasons why local community newspapers continue to grow as a result of continually providing actual news that people want to read. What a concept - newspapers with news!

How Many Ads Do You REALLY See Every Day?

Visit the Hill Holiday Blog to check out their insight on just how many ads we really see during each day. 500? 5,000? Even 13,000?

Maybe I should keep my eyes closed when I head to work every morning to bring the number down into the low thousands....

But then I'd miss the face recognition billboards!

This Interview Sponsored by Dr. Pepper...Or is it Sunkist?

As a member of both Colbert Nation and the Advertising World, imagine my delight when journalist Lucas Conley stopped by the Colbert Report last night to discuss his book "OBD: Obsessive Branding Disorder."

We all know about the pervasive nature of marketing nowadays, and it's nice to see the silliness of it all exposed once in a while. Case in point, the argument over whether the interview is sponsored by Dr. Pepper or Sunkist. At first I was thinking how clever it was to square off over the different brands, allowing them both to get some airtime. After I checked it out, both drinks are actually owned by the same company - Dr. Pepper Snapple Group, Inc. Sneaky, sneaky....

Ad Cutbacks Backfired for Bankruptcy Victims

Mervyn's, Bennigan's, Sharper Image All Dialed Back on Ads to No Avail

In the really tough times, it's almost instinctual for a company to dial back on marketing, but there's a growing body of evidence -- and bankruptcy filings -- to suggest that cutting ad dollars can be the ultimate false economy.

Last week, department-store chain Mervyn's and S&A Restaurant Corp., which owns Bennigan's, Steak & Ale and Tavern restaurants, became the latest to file for bankruptcy. Both Mervyn's and Bennigan's dramatically cut marketing spending in the past 12 months.

According to TNS Media Intelligence, Mervyn's measured media spending plunged about 25% to $76 million in 2007. On a smaller scale, Bennigan's cut spending 75% in 2007, to $347,000. Another recent bankruptcy victim, Sharper Image, slashed its budget 82% in the two years before it filed for bankruptcy in February. Baker's Square restaurants cut spending 19% in 2007 and filed for bankruptcy in May.

Of course, it's not strictly a cause-and-effect relationship. "Obviously there are a lot of factors at play," said Kevin Keller, professor of marketing at Dartmouth. "But the pattern is there. It's not like they were investing a lot in advertising and failed."

***Note a previous post on the importance of advertising during an economic downturn!

(read more from www.adage.com)