Rep Firm or Ad Network: Who's King of the Digital Jungle? by Chris Trayhorn, Publisher of mThink Blue Book, April 6, 2009 Online spending from brand marketers has increased and will continue to do so. Intensified demand for premium inventory on the major portals and prime destination sites has caused cost per impression (CPM) to escalate. As a result, brand marketers are looking for additional outlets from which to buy media more cost-effectively. As they increasingly look across the long tail of the Internet, they are finding that buying media on larger, high-quality sites within the midsection of the tail can be more cost-effective (lower CPMs) and provide better contextual relevancy through creative integration and customized ad placements. However, the mid-tail represents an especially challenging area of the digital jungle. As a brand marketer or an agency, you can either research the landscape and buy media directly across multiple sites or you can work through a third party. Buying direct can be a time-consuming and frustrating process; dealing with small-company webmasters with no media experience can test the limits of anyone’s patience. If you opt to work through a third party instead, it’s important that you fully understand the vendor’s role, capabilities, strengths and weaknesses so your experience is positive and your results are maximized. The two major types of third-party resources are ad networks and site representation firms, or rep firms. Ad networks generally represent thousands of websites and have little or no relationship or control over publisher inventory. They are great if your company’s advertising objectives are broad reach, pure performance and nothing else. Rep firms, on the other hand, act on behalf of fewer sites and are an outsourced extension of a site’s internal sales efforts. They understand and have control over each publisher’s inventory so they can offer guaranteed share of voice (SOV), total ad placement transparency, and creatively integrated media and promotional opportunities. Ad networks have been attempting to re-brand themselves as quasi-rep firms in an effort to garner brand dollars as buyers move down the tail. The following seven key factors describe what distinguishes a rep firm from an ad network. 1. Site Representation Ad networks aggregate fragmented online audiences by assembling as many sites as they possibly can to create a channel. There’s considerable overlap as many networks work with the same sites. A rep firm focuses exclusively on a set of quality sites that comprises a desired vertical market or audience segment. Look for the number of exclusive representation agreements a service maintains to determine whether it’s an ad network or rep firm. 2. Decision-maker Relationships Ad network salespeople rarely have personal contact with individual Web publishers. They can’t afford to, since they’re generally focused on sheer volume. Historically, ad networks have operated by arbitraging media across a wide-reach platform, with an emphasis on performance. In that model, media buying and planning is formulaic, so networks don’t require an intimate relationship with advertisers to develop and execute their media strategy. Conversely, rep firms are heavily invested in face-to-face contact with individual decision makers on both sides of the fence, since matching medium with creative execution is paramount. 3. Marketing Message Marketers are concerned with how their brand message fits into the overall website context. Ad networks generally lump sites into broad channels and have little knowledge of each site’s content and whether it is relevant to or even safe for a particular brand. For example, a major kids’ brand may not appreciate showing up on a site featuring adult-oriented content. A rep firm focuses on identifying sites that are a contextual fit for the brand’s messaging and can make educated recommendations concerning individual sites that may or may not be right for a brand initiative. 4. Ad Placements Ad networks typically rely on fully automated programs to place and rotate standardized ads through unsold/remnant publisher inventory. This means that they have little or no knowledge about each site’s total inventory and no control over how ads move through various spots on a site. By working more intimately with fewer sites, a rep firm has enough knowledge and control over publisher inventory to guarantee certain ad placements at a specific frequency (SOV), thereby providing a complete picture of where every ad appeared and when. 5. Creative Integration Ad networks, being automated, are generally limited to the standard set of Internet Advertising Bureau (IAB) units. And many websites themselves don’t have the in-house experience to implement rich media ad units and customized creative placements effectively. A rep firm can not only use all IAB units, but it can deliver rich-media ad units as well as more customized placements and integrations. These out-of-the-box offerings can include skinnings, microsites, blogs, co-branded navigation bars, promotions, contests, sweepstakes, custom video games and advertorial support. 6. Ad Serving Publishers turn to ad networks to fill unsold/remnant inventory, generally “daisy-chaining” multiple networks together. From any one ad network’s perspective, however, there is little visibility into the type and volume of inventory. A rep firm, through its exclusive relationships, obtains priority access to key website positions and secures primary inventory deals, allowing for more targeted placements and guaranteed frequency. 7. Customer Service With their foundations in the pure performance model, ad networks have not had to develop the personnel and skill set required to work one-on-one with brand marketers to develop, plan and execute site-specific media buys. Buying integrated placements across multiple websites can be a complicated endeavor, so it’s imperative that the company and people with whom you work have the experience to execute on what they sell. Choosing Your Path So who’s king of the digital jungle – an ad network or a rep firm? The answer depends on the nature of your brand, your marketing objectives and creative strategy. As the online advertising environment continues to evolve, ad networks and rep firms will need to adapt and provide a balance of quantity and quality to survive. Filed under: White Papers Tagged under: Brian Fitzgerald, Perform, White Papers About the Author Chris Trayhorn, Publisher of mThink Blue Book Chris Trayhorn is the Chairman of the Performance Marketing Industry Blue Ribbon Panel and the CEO of mThink.com, a leading online and content marketing agency. He has founded four successful marketing companies in London and San Francisco in the last 15 years, and is currently the founder and publisher of Revenue+Performance magazine, the magazine of the performance marketing industry since 2002.