The Un-network Ad Networks
Last week’s Trends Report “Thinking outside the Banner” focused on the new type of ad network, one whose inventory wasn’t limited to IAB formats. And, in a break with traditional web site based networks, many of these companies have amassed their publisher base without the aid of a media buying team. Eurekster came to mind last week as one such example where, by focusing on tools for publishers, they ended up creating a network of more than 20,000 sites, and they have just hit their hockey stick growth curve. For Eurekster and others, ad sales and an ad network became a result but not the initial focus. This week, in the Trends, we look at three companies that took a different approach to building an ad network. Unlike Eurekster, and similar companies, these three started from the get go by focusing on building a different type of ad network.
The first and oldest of the companies seemed almost too simple upon its release. In a time when other companies were focusing on display ads, optimization, arbitrage, and other technologies, this one focused on text ads, transparency, and simple interfaces. Despite the simplicity, or perhaps because of it, or perhaps because of its well known founder Philip “Pud” Kaplan of F’d Company fame, AdBrite caught fire. Besides bucking the trend and ignoring traditional display ad units, the company also bucked any traditional pricing format by offering time based placement. As we see in “The Unmonetizable,” while not common in the US market, it’s a payment model that has strong adoption in Asia.
AdBrite did something else which seemed almost too simple; it focused on self-service, providing information about the sites including prior performance from other advertisers to help them with their purchase. Typical ad networks didn’t do this; obfuscation wasn’t part of the explicit strategy, but as they focused heavily on technology to match ads with placements, they wanted and needed maximum freedom in order to make the most money. For example, a “typical” ad network such as Advertising.com can explain that point. Advertising.com relies on math, not people, for matching ads to available impressions. Success means having as many available ads to chose from per site per placement. They don’t want to run into a situation where they have only two or three ads to show as everyone’s returns will be lower.
A typical ad network is, as a result, opt-out; by default every site is included; whereas AdBrite is opt-in. Advertisers only show on sites they purchase. They are a self-service version of site representation, much like Tribal Fusion is for display. Again, in a display of smart simplicity, by focusing on text ads, AdBrite could offer an opt-in service on a site by site basis with little overhead. Text ads require no heavy administrative load that comes with managing banner campaigns, especially rich media ones. Sites and advertisers could come on board at a rapid pace with ads being uploaded and shown with no delay. All in all this simple approach represented a fresh take on ad space and proved that you get a lot done by actually getting out of the way.
Today, AdBrite has a large and eclectic mix of sites and advertisers. Of these newer, non-ad network ad networks, it has the biggest usage by direct marketing arbitragers. It’s ad space is a haven for affiliate programs that don’t work elsewhere; and those who run lead gen and ringtone campaigns who have the patience to look for undervalued slots of inventory. Arbitragers won’t be using as much of the other two companies – Adify and Text Link Ads. The first, Adify, also has well known founders; theirs came from one of the better known ad networks pre-bust – Flycast which CMGI purchased for a hefty sum in the 1999/2000 time range, which means they probably don’t have to go the mac and cheese route this time around.
At first glance, Adify seems similar to AdBrite. It offers advertisers a self-service interface by which they can place ads on sites they choose. The difference is two-fold. They focus on display inventory versus text, and they offer increased functionality for sites to describe themselves and sell multiple placement offerings. AdBrite versus Adify – it’s a network hub compared to a site approach. From my perspective, Adify sells itself as back office for sites that do not have the infrastructure to handle ad sales. It is expected that the majority of advertisers, through the platform, will have found the site first, then use the platform. AdBrite, on appearances anyway, have a greater percentage who come through the marketplace, versus having found the site they wanted and used the marketplace to purchase the ad. As the newer entrant, we’ll see how Adify does. It’s non-binding, non-exclusive, so publisher adoption should be high, as any inventory sold through it for sites with existing monetization methods is presumably at a higher margin.
The last of the three, Text Link Ads also shares components with the other two. It focuses on self-service and transparency. While it offers text ads, the network is what you get if you asked search engine optimization guys to figure out web distribution. Their solution is quite an innovative one. They focus less on the actual number of clicks and the performance of the placement and more on the value that can be derived from having ads on other sites. Ads can be traffic but more importantly, they can be a tool for getting ranked higher in organic search. Their ads carry a double plus – traffic now and the potential for traffic later. It’s not for arbitragers though; their network is more competitive and less about instant break even. Instead, it’s an example of how to think about a problem differently than others.
All three companies fit in between the more traditional ad networks and the outside the banner companies who have inherited ad inventory by creating something of value for publishers. They bring advertisers and publishers together, use technology to help, but place more control in the hands of each party. So far none has shown the ability to create a company that can rival a more typical ad network in size and scale, but AdBrite and especially Text Link Ads shows you can play in the space of the bigger companies without their same level of resources.
