I just read a great piece by Michael Zimbalist of the New York Times Company on paidcontent .org. He clearly has a deep and precise understanding of the substantive issues at play in the channel conflict debate. The more other major publishers and the market at large understand the distinctions he’s helping to clarify here, the better off we’ll all be. We’ve certainly done our part to help clarify terminology and to help publishers prevent channel conflict, so it’s great to see smart publishers joining that effort.
An insightful article by Emily Steel in the WSJ this AM, picking up on recent trends and energy in the display market. Ms. Steel includes some broad coverage on Google’s recent announcement of AdX 2.0 and implications for the display ecosystem, along with more depth on industry concerns regarding channel conflict between publishers and networks. A quote from Jeff Levick of AOL ends the article: “All advertising shouldn’t be managed equally and all ads shouldn’t be treated equally”.
I agree with Mr. Levick of course, but the hard part for publishers is to set specific policy and develop supporting infrastructure to make sure tradeoffs are being made appropriately such that that the combined output of direct and indirect sales channels is maximized. This is a mouthful even to say and not at all easy to do. Brand.net takes the issue of channel conflict very seriously and we have been focused on mitigating it since inception, to the point of offering a set of experience-based principles designed to help publishers get started. The bottom line is that with well-designed policies and systems, publishers can enjoy mutually beneficial business relationships with networks in both the short-term and the long-term.
Readers finding this article interesting may also be interested in another recent post in which we attempted to clarify some terminology in hopes of helping readers more easily navigate discussion of some of these trends and issues.
All this energy in the space is fantastic! It’s a very interesting time to be in Display.
I am putting the blogger hat back on after a hiatus for the birth of my first son on 7/29. Baby and Mom are healthy – thanks for asking!
This article on MediaPost – erstwhile Internet Analyst Jordan Rohan sharing some observations about ad networks – was the first in my archive. In the context of Mr. Rohan’s comments on network margins, I would assert that networks with truly differentiated capabilities earn whatever margins they capture. However, I do agree that there is too little differentiation in the network space in general. In particular, network reach tends to receive more focus than it should (as I have previously mentioned), while differences in specific capabilities tend to receive less focus than they should. On the other hand, I strenuously disagree with Mr. Rohan’s assertion that networks cannot be blind. I have written in detail on how seriously we take the channel conflict issue and how we help our publishers partners manage it. Blindness is fundamental to our approach. Mr. Rohan suggests posing as media buyer to test network claims of blindness. I can tell you some of our publisher partners have done just that with Brand.net and come away satisfied that we are as concerned about channel conflict as they are and that our SafeScreen page-level filtering technology gives content-sensitive Brand advertisers an assurance of page-level content quality that even transparency would not.
The truth, but not the whole truth and some things that aren’t the truth.
Another anti-ad network screed from Ari Rosenberg yesterday on mediapost. I sincerely appreciate his passion on this issue, but I respectfully disagree.
He’s absolutely right that lots of ad networks lie. Way too many for my taste frankly, but certainly not all of them. For example, Brand.net takes our commitment to preventing channel conflict with our publisher partners very seriously. We have to or we would not continue to be able access the best inventory on the web for our clients. Every conversation we have, we conduct as if there were 3 parties in the room: Advertiser, Publisher and Us. No wink, no nudge, no lying. We sometimes lose sales to other networks because of our principled approach to this critical issue, but our SafeScreen page-level filtering technology provides a level of content safety not available from other networks – blind or otherwise – and most clients understand that.
I think we all need to recognize that agencies are looking for efficiency for some portion of their overall buying activity. I am not just talking about pricing. Buying 50 (or even 5) sites through a network is dramatically more efficient from an operational perspective than buying those sites individually. There’s no way around it. Think of TV buying without national networks. The media market has changed since 2003 when Ari left IGN. There’s a reason why networks exist and that reason isn’t going away; some portion of ad budgets will continue to seek efficiency. Publishers can successfully mitigate channel conflict while still accessing these budgets by requiring networks to be blind and implementing a few other simple policies which I laid out in a byline earlier this year.
The typical publisher CEO is pushing her VP sales to use networks because she intuitively understands all of this. Not every VP Sales is going to cheer about adding a sales channel that puts pressure on his team. Just like not every print division GM for a newspaper is going to be excited that he can’t buy a new printing press because the company is investing in the web publishing effort. Lack of excitement within one constituency doesn’t mean a particular decision is bad for the company. It’s the CEO’s job to maximize long-term profitability for shareholders, not to maximize near-term revenue generated by one sales channel or business line. That said, I think Ari might be surprised by the number of sales leaders I meet that think like CEOs.