Not Dead Yet: Why the Ad Network Model Is Here to Stay

Rami BrusilovskyIt’s no secret that the many ad networks have struggled as both agency trading desks and the various programmatic players increasingly becoming the ‘go to’ intermediaries between publishers and brands. Yet there are still ad networks that are not only surviving, but flourishing. One of those networks is DMG, an Israeli multichannel network. Here Rami Brusilovsky, VP of Video Advertising at DMG, explains why he believes the ad network model will continue to add value to the online video ecosystem.

The advertising industry has changed beyond recognition in the last ten years. Various new developments have made life difficult for both advertisers and publishers, most notably the rise of online advertising, the growing importance of data and ad technology, as well as the emergence of new content formats, devices and marketing channels. These added layers of complexity have forced businesses to rethink how they approach they buy and sell advertising inventory.

For smaller video advertisers and publishers, the most pressing question is how to punch above their weight and compete with the giants of the new marketing world. The solution for the smaller players is, in my opinion, provided quite ably by the ad networks.

Ad networks provide smaller video publishers with access to the spend coming from the high quality brands. Whereas larger publishers have specialist sales departments and the kind of scale where it makes sense for them to have direct relationships with brands, smaller publishers often struggle to make their voices heard.

As ad networks work with businesses of all sizes, publishers achieve scale by joining together via an ad network. This adds an extra layer of protection for video publishers. As their business grows they can ensure that they are matched with the correct ads and scale up or down as their level of demand for the new content fluctuates.

This is in contrast to self-service platforms such as the one offered by Google. While Google rules the online advertising roost, it’s so big that it’s difficult for them to provide truly effective account management services for small to medium size enterprises (SMEs). Unless you are an expert in campaign optimization it is very difficult to gain maximum value from advertisers, however, the service is very scalable. Similarly, platforms and exchanges do not provide high quality account management to smaller publishers and advertisers. Again, this is where ad-networks have an advantage. The majority of ad networks have an additional account management service layer that caters to advertisers and publishers of any size.

An added bonus for video advertisers is that ad networks also have access to syndicated ads and often have a wealth of in-house expertise that can help clients respond to rapidly changing market conditions. Which is no small thing in an industry that moves as quickly as ours.
For advertisers, ad networks provide a vehicle to get access to high quality publishers under the best possible conditions. For example, it is nearly impossible to gain an affordable advertising rate on The New York Times without the help of an ad network.

Put simply, approaching specific publishers directly usually means paying the top price for inventory. Although real time bidding has provided opportunities for performance advertisers, there are still a lot of unknown factors for publishers when it comes to ensuring the the quality of the ads being shown on their sites. By going through an ad network the risk is shared, and as a result advertisers get access to better publishers, while publishers are more likely to see ads from respected brands running on their properties. In our experience, the result is that everyone is happier when there’s a human is monitoring what ads are and aren’t being shown.

While I’m clearly bullish about the future of the ad network, that’s not to say the model won’t have to adapt and evolve in the coming years, or that all ad networks will survive the programmatic revolution. Some will fail by the wayside if they don’t deliver the kind of value outlined above.

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