The Pros and Cons of Ad Networks
Working with ad networks is hardly a business fairy tale in which they act as a genie in the bottle that you bind to save your advertising business. Instead of granting you wishes of guaranteed success, you are more likely to be presented with a business model that is best approached as a system that is offering both blessings and curses. The outcome of this endeavor will largely depend on what you set as your priorities and expectations. If you still insist on wishes, make sure to immediately wash away any thought of turning ad networks into a magic wand for producing overnight solutions for the online advertising business. Instead, you’ll do much better to focus on examining all of their pros and cons and planning for the future accordingly.
So, let’s start with one of the more obvious reasons for desiring to work with ad networks in the first place – the monetization of your web property, be it a blog, business website, podcast or whatever floats your virtual boat. If you are a publisher or you aspire to become a full-fledged one, you certainly want to make money as your side income or create a revenue stream for running a website. At generally affordable prices, ad networks make it easier for you to plan ahead with your revenue on a per-user basis as well as offer more quality monetization of your ad inventory (up to 100 percent).
Thanks to their impression-based model in which the advertisements are registered as seen as soon as they are sourced, working with an ad network means that you are free from worrying about visitors clicking on ads. Ad networks also allow for selling larger than usual portions of inventory. This may prove to be an asset for providers of content despite the fact that revenues generated by means of a per-impression model are usually lower compared to direct sales.
In addition to making it easier to carry out cost-benefit website analyses of financial projections for your site, working with ad networks can be a favorable solution for prospective or new publishers who have a hard time reaching sponsors and advertisers that allow them to secure beneficial marketing deals from the start. Another advantage of ad networks is that they ensure a fast generation of revenue streams. This can be particularly advantageous for owners of newly established web assets that require faster access to funds to provide for costs of running the site in the first place.
Targeting a Wider Audience for Monetization
Similarly, as a publisher, you want the ads displayed on your site to reach as much audience as they can. No matter what advertisers you may get, some of them are prone to asking for restrictions of traffic in line with their plans of reaching their desired audience. If your site addresses the audience from your home country, this may not escalate into an issue, but it can become problematic if you want to reach a global audience.
This is where ad networks jump in, as they allow for a broader reach in the global marketplace. They allow for showing the ads from the network to a broader range of audience, thus streamlining the generation of revenues from having a higher number of visitors which, in turn, helps with attracting new ad networks.
Benefits of working with online ad networks [Credit: eMarketer]
In this manner, ad networks basically act as a platform specifically designed to extend the reach of your advertising efforts above and beyond the most obvious choices on the web, ultimately boosting your website visitors statistics. From the advertiser’s point of view, these networks allow advertisers to reach content-heavy “niche” sites and leverage their specialized audience (gaming fans, hiking communities, music enthusiasts, for example) and the interaction they have with the publisher’s content. Thus, all of the parties involved can benefit from the utilization of the full potential of the internet as an advertising platform.
Balancing Between Convenience and Revenue
This type of business symbiosis also makes it possible to reap important non-financial benefits, in the sense that ad networks free up the resources of a web asset owner, which would be otherwise dedicated to 24/7 running of marketing campaigns. Simply said, an ad network is a more convenient solution if you want to focus your energies elsewhere, whether it’s on delivering more quality content to the audience or improving your site’s SEO. Otherwise, selling your ads to advertisers directly means that you need to invest more in creating (and paying for) a capable sales team that needs to bring you enough lucrative advertising deals. Doing this means that you will have to strike a balance between managing your content, securing enough traffic and dealing with advertisers simultaneously. At the same time, you get to keep the money to yourself, making it obligatory for you to rank your monetizing business priorities in advance of deciding which models work best for you.
Shut Up and Take My Money… Wait.
Similarly, working with an ad network means that you have access to more advertisers in general, helping you diversify your ad offer. Generally, the more advertisers you have access to via ad networks means more advertisements on the site, which is easily translated into more clicks or views. At the same time, this diversity can make the need for filtering the ad content even more pronounced, as you can, theoretically, end up having ads for fast food chains next to your well-written and informative blog posts about the benefits of consuming organic food. These irrelevant and out-of-place ads can end up on your site if you decide to fully relinquish editorial control over what can be advertised or not, thus potentially antagonizing your audience and ruining the credibility of your content. The best ad networks will create custom-tailored offers for their clients. RevenueHits, for example, offers custom-fit solutions from different verticals like Dating, Mobile or Shopping, allowing customers to eliminate potential conflicts between content and ad copy while staying relevant audience-wise. In any case, doing your homework in the ad network selection process can be helpful in this regard.
This issue is also related to another negative aspect of the ad network business, and that is their potential to be turned into generators of bad traffic from questionable publishers. The problem of non-human traffic has long been plaguing the market, making it obligatory to keep your eyes open so as to avoid purchasing fraudulent offers and blowing the budget in the process. This means that, once again, assessment of an ad network’s suitability for cooperation needs to include checking its potential for the provision of all types of support that promotes healthy business dealings from the outset.
A lot of money is being wasted on fraudulent traffic [Image Credit: Business Insider]
All in all, is it possible or even advisable to conclude that either strengths or weaknesses are predominant when evaluating ad networks as a business model at the disposal of both publishers and advertisers? In short, no, giving a definitive answer to this question will hardly satisfy anyone, as ad networks are not in the market as a universal cure for every marketer’s woes. Feel free to experiment with various networks and the features they offer, bearing in mind the above, as well as the thought that a clear understanding of their basic business rationale will make it more likely that you’ll experience them as your genie’s lamp rather than a can of worms.