Publishers and the ad-network black box
As more publishers leverage Internet advertising to generate revenue, there's a need for advertising networks to be less of a black box to the publisher and for services that help the publisher maximize their revenue.
My last post ("Pitfalls for publishers using ad networks?") was prompted by a dramatic reduction in the ad-revenue generated by my blog in March as a result of the end-of-month "true up" by FeedBurner (the ad network I use on my blog feed and web site).
I contacted FeedBurner last week and received a prompt and detailed explanation of the cause. Turns out that one of the advertisers uses a third party to verify the number of ad impressions delivered as an audit function – they only pay for verified ad impressions and the third party had incorrectly configured their server resulting in only 55% of the impressions being counted. The reduction in verified impressions led to the reduction in generated revenue.
FeedBurner was very responsive and provides a lot of information for publishers to manage the advertising delivered with their content but it hard to track ad impressions to content.
If you read my last post, you know that I inserted a tracking GIF into the post so that I could compare the number of downloads of the tracker against the post readership stats reported by Feedburner. No surprises here – Feedburner's account of readership was very close to the number of tracker downloads with any differences (< 5%) explainable by duplicates in the logs from my web server.
It's much harder to determine which posts led to which ad impressions – a publisher's view of yield if you will.
Advertisers look at yield in terms of the percentage of ads that delivered a desired result – for direct mail for example, it's the percentage of replies received for a given campaign; for e-commerce advertisers, it's the "Return on Ad Spend" (ROAS) which compares dollars of revenue generated per dollar of advertising. I led an investment in ClickShift which provided a service to maximize ROAS through campaign management for the advertiser – the results were spectacular and showed just how much opportunity exists for improvement.
There's clearly an analog to this improvement opportunity for publishers – managing the placement of ads from different ad networks with content generated by the publisher. This would enable the publisher to maximize revenue generation by steering impressions to ad networks that provided larger inventory and higher CPM ads.
Content is moving towards syndication over more and more channels (web widgets, RSS, Instant Messenger, Mobile,…) and there will be more opportunity for the publisher to maximize their revenue from advertising both within and across channels. It's going to require additional instrumentation and smarts plus more transparency from the ad networks. This will help publishers and doubtless place downward pressure on the revenue splits with the ad networks.