So, this business about click through has me thinking. Why are most clients interested in click through?  And why do ad agencies harp on click through? I’m beginning to think it’s because we in the ad network business push CTRs due to the fact it’s a metric we have access to easily and don’t want to do the extra work required to understand what the proper metrics are for the campaign. This may seem like a harsh statement, but it makes sense. If you’re only tool in the tool box is a hammer, you’ll use it as pliers, a hammer, and a myriad of other tools rather than using the proper tool for the job at hand. In the industry’s defense, based on the search world, CTRs became well known and a highly profitable metric and it carried over to banner and now over to video.

We in the video world, or at least at YuMe, have access to a real toolbox with dozens of tools, so the trick is just figuring out which tool to use for which job and then reporting on that. Not hard, me thinks.

- Jayant Kadambi

I’ve decided I like wither. I actually use the transitive verb more in my language, as in withering contempt. Yes, you were unsuspectingly reading a blog and you ran into an unneeded etymology lesson.

Businessweek, that publication that sorta sits between The Economist and Time (IMHO) wrote recently that Ad Networks are Transforming (with a capital T) the online landscape. It’s sorta a can’t live with them, can’t live without them story.

As far as I can tell, I have always had two choices to go buy that Ferragamo shoe. I can go to the Ferragamo store directly or I can go to a retail outfit such as Macy’s to buy it. Ferragamo have chosen to distribute their shoe in multiple locations for a whole host of reasons, which mainly include reach, but also include competitive reasons (I’m sure Macy’s also sells other shoes in the same class). They, (Ferragamo) have figured out how to avoid wholesale competition with Macy’s and they run a thriving private retail business themselves.

I’m not sure what all the angst is about from online publishers about ad networks. If you can sell it better yourself, please do. Everyone tries, and due to inefficiencies in the market, in the ad operational systems, and in whole supply chain, there is left-over inventory. Also, publisher reach at any given time may not be what is necessary for all advertisers, and ad networks can provide that. It’s not a question of devaluing the inventory, and most of what ad networks do (at least the one I can speak for) is net accretive to the existing business. Anything we do is.

To remind everyone, we sell publisher inventory on a non-guaranteed basis across vertical, targeted channels, much like the channels you see on TV. We list our publishers content and promise the customer that their ads will run on the relevant content in that channel and nowhere else. It’s transparent, not sleazy, and we don’t run any tricks. If the customer wants 4M impressions of a particular partner publisher of ours, we send them directly to the publisher. If the customer wants a 100M impressions and wants to target a range of content across many publishers, syndication points and formats, and wants real-time optimisation, we’re a good choice. It just like the Macy’s, Ferragamo argument above. There are reasons to shop at both.

Jayant Kadambi

If you haven’t seen the article from last week titled “Forbes Expands Ad Guarantee Program“  it got me thinking and writing. So here’s my post.

Forbes is “guaranteeing reach and frequency” for its ad buys. But only if you are part of an elite group who spend a serious amount of money on Forbes per year. Hmm, so Forbes doesn’t guarantee reach for the proletariat? If we don’t deliver the reach we promised (as per the IO), we either continue the campaign until it delivers or refund the money. I’m not sure what it means to guarantee it. Guaranteeing frequency? Well, we do that (as I’m sure others do). We’ll frequency cap the ads so the user doesn’t tire from seeing the same ad, if that’s what the advertiser wants. Basically, I’m confused about the point of the article or what Forbes was trying to say.  
 
The article goes on to state that Forbes is against the proliferation of ad networks. I guess it’s ok to say that. It’s their opinion. But the article didn’t spend enough time on why. Let me open on a couple of reasons why Forbes could think this is a good idea (and then quickly plug YuMe while doing so…)

First - Ad Networks take away business from Owned and Operated (O&O) sites such as Forbes. Well, Forbes of all magazines should be OK with a bit of friendly competition. What are they afraid of?  That we’ll outperform them because we have a far larger set of content, uniques and publishers so we can optimise and spread the ad around better to make the campaign perform better?

Second - Ad Networks are devaluing O&O inventory?  Maybe the display and search businesses sold their inventory blind, but we don’t. Everthing is transparent and we sell inventory at premium prices, while have the ability to blend in other inventory to lower the effective cpm for the advertiser, yet maintaining the campaign metrics and goals.

Third - When advertiser go to the O&O publisher and the publisher is sold out, they shouldn’t have another choice, so they simply book their ad campaign next month or next year, instead of finding another alternative. See the first point above. Sounds pretty anti capitalist to me.

- Jayant Kadambi

We all subscribe to some sort of e-mail trade newsletter (i.e. Online Media Daily, OnlineSpin, eMarketer, Brandweek, and the list goes on) and get our dose of industry news. This week there was a lot of buzz around online ‘ad networks,’ from vertical to behavioral to the conventional ones.

Headlines like:  “Forbes Joins Ad Network Fray,” “ESPN Turns Off Ad Nets,” “AOL Ad Project, ‘Platform A,’ Plots Plan B,” I know, I know. I hate to just re-cap and link off to these stories. But I thought if you missed the boat, these were some of the articles worth reading.

With all that said about ad networks, I came across Avenue A’s Digital Outlook report that highlighted their $735 million in billings in ‘07. No secret that every year more money is being spent overall online. Now looking specifically at the ‘ad networks’ line, which accounts for 11% of their ad spend, ad network expenditures were up 36% from ’06 – ’07, which is a trend I expect will continue. What I’m anxious to see over the next few years is the trend between banner and online video expenditures…

- Lynn Cayabyab