Network Magicians: Agencies & Affiliates Reveal the Tricks to Picking Ad Networks

by eric.reyes@mthink.com
October 22, 2009

Top interactive agencies and affiliates share their tricks for picking the right ad network. Conservatively estimated, there are upwards of 400 ad networks globally. There is a Japanese iPhone-only ad network and the recently launched Village Voice alternative weekly New York newspaper ad network – and everything in between. For ad agencies representing top brands, and for affiliates trying to make a living in the increasingly competitive world of performance marketing, picking the right one is critical to survival. Choosing poorly spells disaster for everyone.

The choices of networks can seem daunting. The good news is that it doesn’t need to be.

Simply put, ad networks help agencies place interactive ads – display, text, mobile – onto vast numbers of websites simultaneously. For agencies, it’s like having one media buyer do the work of 20. For affiliate marketers, it nearly automates the actions, clicks or leads they need to make their living.


The proliferation of ad networks isn’t killing healthy competition. It’s helping it, according to the experts. The varieties of vertical networks are endless: ad exchanges, niche vertical, mobile, video, contextual, performance-based, portal and even ad networks that help to manage multiple ad networks. Sure, there are still networks that may serve up more fraudulent leads than genuine ones, but the number of trusted networks is only growing as more companies and affiliates test them out and proclaim them worthy.

So, how do you choose? The experts are the ones out there with the proven track records, so we asked top affiliates and leading-edge agencies to erect the signposts for us. They have the experience; they know what to look for.

Agencies Online
Interactive agencies of all stripes have certainly gotten used to using ad networks to sell and place their virtual buys – it’s like having tiny media buyers placing ads all over the Internet. In fact, 89 percent of all U.S. agencies and advertisers are or are planning to use an ad network in 2009, according to Collective Media. That same study found that about a quarter of advertisers plan to spend between 16 percent and 30 percent of budgets with ad networks in 2009, compared to just two years ago when nearly 90 percent of the same respondents planned to spend 5 percent or less of their budgets on ad networks. But the criticism remains that so few agencies seem to know how to properly vet an ad network, especially those in narrow verticals.
 

Most agencies want certain key features:

• Reliable metrics
• The vast reach of your network
• Great targeting
• Fraud control
• Universal acceptance in the industry
• Transparency in ad positioning

Geno Prussakov, who operates AMNavigator.com and wrote “A Practical Guide to Affiliate Marketing,” says the first big decision for big brands is whether to use a network at all. “From first glance,” he says, “it may seem to be more effective to run an affiliate program in-house. There are pros and cons to both methods of running an affiliate marketing program. In-house affiliate programs help you save money on network fees, while network-based affiliate programs allow for a larger affiliate program exposure and numerous affiliate recruitment opportunities.” Most big companies would defer to agencies in picking the network to use.

Once they do, Michael Jacobs, chief services officer with iMarketing, says his No. 1 concern would be tracking. “Without it, what do you really have?” he says, adding that he wants “data across a wide variety of trends with quick access to the broad and the deep.” For Jacobs, detailed tracking and reporting is like the tires on a car – it’s the bare minimum to getting everything running.

Not to get hung up on the technical aspects, but a lot of interactive marketing shops rely heavily on the details so that the network can help them hit their numbers. Targeting capabilities, ad types and their placement, pricing structure, and how user-friendly is it all, are important considerations, says Michael Cassidy, CEO of Undertone Networks. “These attributes are often what initially attracts marketers to ad networks. From ensuring that you reach your target audience, to accurately measuring and optimizing campaign performance, the right combination will affect campaign success.”

Reaching more folks is only half the story if you’re reaching the wrong people. That’s why targeting is also a big-ticket item for agencies. Questions agencies should be asking about targeting are: What variety of targeting options do I have? Can you send selected creative to only certain portions of my audience? How precisely can you pinpoint my audience? “Digital advertising is getting increasingly sophisticated,” says Robert Tas, CEO of sports-centric network Sportgenic, “and the ability to offer tailored targeting and creative will become increasingly important over time. You should begin to create relationships with networks that will be able to provide those essential services.” A Collective Media survey conducted this year confirms that more than 60 percent of networks are using demographic, behavioral and contextual targeting. Joe Apprendi, CEO of Collective Media said in a statement that the findings “support the shift collective media is seeing among advertisers and agencies toward buying audiences rather than just sites.”

In regards to vertical networks – those that serve sites related to a niche area such as sports – Lehman Brothers reported a 43 percent bump in ad spend in the vertical categories in 2007, compared to a 5 percent drop in spending on portals.

Tas also adds that the little things help define a network and its capabilities. For instance, notice what kind of status the network has with its sites – are the ad placements the best or does it look like a lot of remnant inventory? Notice whether the network is growing, Tas says. How are the reps? The people who you are going to work with may make all the difference.

For some agencies it is all about protection. “The biggest thing for us in looking for an ad network or CPA network, is to look for fraud,” says Jamie Birch, owner of performance marketing agency, JEBCommerce. “Protection from fraud and locating it and eliminating it. When someone gets an industry award, we look at them.” You can have bad experiences, he says, adding that you are probably not going to get as much transparency as with an affiliate program. You will need to look at the quality of the leads; how many were fraudulent?

More and more, the role of platforms is coming into play. While most networks still are generally ad placement engines, the variety of programs a network uses will become more important. A network that works across digital platforms is going to appeal to a certain kind of agency. As the digital audience uses more mobile, gaming, social media sites and widgets, so must the network. “We serve ads to [website] publishers across various mobile platforms, trying to show that mobile spend is as effective as other spend,” says Lar Albright, senior VP for business development at Quattro. “It’s not that crowded in mobile. We see a big push for information and that followed by big spend. They are just trying to make sure they make really good decisions.”

Some in the interactive media arena don’t see it going so smoothly when it comes to getting what you want from networks. Pat Asher, director of interactive media at Quigley Simpson, says that networks are not necessarily transparent. “They give you a list of sites you maybe are on, maybe not,” she says. “They don’t tell you where the ads go. It’s my money and my client’s money, so that makes you suspect.” Sloan Broderick, managing director at MediaCom Interaction, wants to know, “How can you help me make sense of where my dollars go when I spend my ad dollars? I love and hate them. There is ease of use and flexibility, but data is how we make investment decisions. Some can help us make those decisions quickly and some are slow.”

This brings up the problem more and more brands have with the networks – quality of the eyeballs. In March of last year, cable channel ESPN, for instance, pulled out completely from all networks it worked with, citing its “business needs” as a reason, which means the ROI wasn’t justifying the spend. “I don’t think you can get the same branding from a network as a specific buy,” says Dave Zinman, vice president for display advertising at Yahoo. “The reason specific buys cost more is because you have the surety. Yes, you can still get value but [not] the same value. You sacrifice value for reach.” But the ESPN debacle is seen within networks as a rare thing.

Jacobs of iMarketing says that when it comes down to the technological matters facing networks, the old reliable is still how you cut through the clutter. “It is so easy to be a network,” he says. “The technology is so common place nowadays. Differentiation comes from other places.” Agencies should have a checklist and a process for selection and stick to it.

What Top Affiliates Seek
When affiliates use a network, it all comes down to consistency and tracking. A lot of networks pay affiliates on a CPM basis – a network will pay a set amount for every 1,000 times an ad gets displayed on a website. Popular networks like Casale Media and Tribal Fusion do this. Affiliates can also use CPA or CPC – cost per action, or cost per click. Google AdSense is the most known CPC vendor. Commission Junction is known for its CPA network.

Sometimes, however, advertisers may be saddled with awful landing pages, poor tracking systems, ad creative that looks cheap or maybe a technologically antiquated checkout process. Since these are out of the affiliate’s control and can lead to a no-sale, the network comes in handy for standardized processes and quality control.

To choose the right ad network or networks requires a gut instinct. At least that’s what many affiliates seem to say. However, there is a checklist that top performers agree must be ticked off before anyone should join a network.

The major ones, in brief, are:
• What’s the minimum payment?
• How often will I get paid?
• How good is your tracking?
• What are the ad types and sizes?
• How ironclad is your contract?
• Can I still sell my own ads?

Affiliates agree that a network is only as good as its tracking. While programs like AdSense give them pretty much real-time reports on traffic, some networks only post reports once per day or once per week. Some affiliates have said they need to decide to pull a site down if it isn’t performing hour by hour. And with some publishing 100 sites at a time, that decision needs to be made on a single site in pretty much a split second so you can go on to evaluate your other 99.

Wendy Piersall, who runs eMoms at Home, says there are many things to look for when shopping around for a network, not least of which is to be clear on what a network requires from you as to exclusivity. Some, for example, want exclusive rights to all of your ad space. Some just want exclusivity only above the fold, while some want the highest ad spot on your page. Some only want banner ads, leaving the affiliate to sell text ads. “Be very clear about what they require, because the network could drop you if you don’t comply with the agreement on ad placement,” she says.

Since affiliates are always looking to maximize their payout, a major concern is the exact money terms. Zac Johnson, author of the “Super Affiliate’s Guide to Riches,” says, “It no longer takes investment money and a custom back end to build a network, but instead the ability to run a trusted network that makes money for affiliates and builds up a reputation to fly above the competition.”

For payment specifics, affiliates suggest you read a network’s contract before signing and make sure they spell out the minimums, methods and frequency of payment. First, be aware of the revenue share with CPM programs, Piersall suggests. Splits can run from a very equitable 50/50 to 70/30 with the affiliate taking the short end. Then ask for the payout schedule. Monthly is a reasonable frequency although some do pay quarterly. Ask how long it takes to pay from the end of a cycle, because 15 days from the end of the month to get your check is much better than 60 days. Ask if they send paper checks the old-fashioned way or if they can deposit directly into a PayPal account. And will the network pay you even if the actual advertiser hasn’t paid the network’s invoice yet?

Prussakov says affiliates need to do their homework. “Search the Internet, as well as forums and blogs for reviews about the network, and only when you are 100 percent sure that they are reliable, join. When in doubt, or when no information can be found anywhere, it is always good to ask, and affiliate marketing forums are good places for that.”

For the most successful affiliates, going with one single network is tantamount to leaving cash in the street. John Chow, owner of TheTechZone.com, says, “Don’t put all your eggs in one basket. That’s why it’s so important to have a good mix of different advertising models on your website. If all you do is rely on Google AdSense, you’re leaving a lot of money on the table.” He adds that it will take time to experiment with different ad networks and different types of ads to find out exactly which combination garners the most money.

And in searching for that magic combination, are you going to be working with a first-tier or second-tier network? Chow says that in terms of traffic quality, with second tier you never know where the clicks will be coming from. “A lot of the clicks are from content-based pages and expired domains, so the conversion rates can be lower than straight search traffic,” he says.

Some affiliates use networks to cherry-pick placements if they don’t work much with CPA, for example. Kim Rowley, who runs Key Internet Marketing and its more than 30 sites, says, “If I do want to run an ad on a specific topic such as Britney Spears or lava lamps, I use OfferVault.com to search to see what network has an ad for that.”

If you are new to the affiliate space and wonder whether you should even join, veterans such as Elise Bauer, who owns Simply Recipes, says you should be getting more than 1,000 page views on your blog or website before you consider joining a network. “That means at 1,000 page views a day, you’ll make $3 per day from those ads, or $90 a month,” she says. “So, if you have 100 page views a day, that translates into only $9 a month. Hardly worth the effort in my opinion, but hey, it’ll buy you a movie.”

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3 Responses to “Network Magicians: Agencies & Affiliates Reveal the Tricks to Picking Ad Networks”

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  3. mtadmin Says:

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