Publishers Won’t Run Their Own Contextual Networks

Well, at least not in mass numbers.

FAST Search and Transfer, the people who brought us AllTheWeb.com, are soon to launch a product called AdMomentum that allows publishers to create their own “Adsense-like” contextual network for selling to advertisers directly, instead of sharing their spoils with Google or other contextual ad network providers.

Some are pretty excited about the idea, others like Andy Beal are don’t buy it. First, they really aren’t the first to do this as Quigo’s AdSonar and ContextWeb have been around for a few years now. Second, while the time is probably more ripe today for publishers to be ready to roll their own contextual solution for advertisers, I still don’t think the majority of the publisher world is ready to do such a thing.

There are many things I’ve learned over the past two years working heavily in the online advertising space, and three of them are important in this issue.

1. Publishers don’t want to do deal with advertising.
Publishers for the most part want to focus on publishing their sites. They aren’t experts in advertising, they don’t always like advertising, and they only deal with it because they need to pay the bills and they want to grow the revenue generated from their site. I’m generalizing a bit here, but I think it holds pretty true in general. Even if they are knowledgeable and excited about advertising, they really don’t want to deal with much of the complexity involved. They just want to make as much money as they possibly can with the least amount of hassle.

While I haven’t yet seen the AdMomentum platform, it sounds to me like it will take work on the publisher side, and anytime you’re selling to advertisers directly that’s the case. AdMomentum will have to be extremely easy to use for it to be an easier process than signing up for an ad network, pasting some code, and cashing your check.

2. There is a lot of value in ad networks.
This is partially true based on what I just said about publishers not wanting to deal with hassle. Often ad networks are the ones dealing with the hassle. They optimize the campaigns, they aggregate creatives, they host the data and serve the ads, they eat the bandwidth costs, they find the advertisers, they deal with the advertisers, they bill the advertisers, they collect from the advertisers, they pay the publisher, etc. Publishers often wonder and complain about ad networks taking such a big cut. The reality is that ad networks do a lot of work and provide value. Many people I’ve talked to over the past couple of years have wondered if what we do at Right Media threatens the ad network business since we aim to make online advertising more efficient and many see networks as middlemen. The reality is that the networks provide value, and sometimes when you put the advertisers and publishers directly in contact with each other, things work out worse than if you have a network managing the process and taking their cut in the middle.

3. Very few publishers get direct advertisers.
It’s the dream of many publishers out there to have mobs of advertisers beating down their doors to directly advertiser on their site. The reality is that really only the top 5% of publishers ever sell direct advertising. Generally, in order to sell direct advertising you need to either have a lot of traffic, or be one of the leading sites with a great name in your industry. Maybe this is who the AdMomentum program is made for, but those top publishers are already in bed with a lot of people, and one or more of the contextual networks is often one of them. Ad networks provide advertisers to publishers. Advertisers they’d never get otherwise. Does Google take a nice cut? Sure they do, but they bring the publishers a heck of a lot more advertisers than that publisher would ever get on their own. Plus, a smart publisher will sell everything that they can direct anyway (they probably already are), and then use ad networks to fill the rest.

It’s these three reasons that I don’t think AdMomentum from Fast will have much uptake. Running your own show as a publisher takes work, hassle, and the ad networks bring more value than people usually realize.

  • http://www.webmetricsguru.com Webmetricsguru

    Well, what about if the publisher is also the advertiser to their own site (but a different part of it)?

    Since last year, I thought that was the answer for sites like IBM, HP and DELL – AdMomentum could allow … say….a brand within HP Laptop to have an ad from …say, HP Printers – all the impressions/ clicks – conversions being recorded by the engine.

    I know people are looking at AdMomentum as a “roll your own” AdSense/AdWords – go get advertisers, etc. I’m looking at it more as an internal corporate PPC /Contextual engine for companies to make a richer, more natural cross sell/upsell experience.

  • http://www.conversionrater.com/ Pat McCarthy

    That’s a solid idea Marshall. Obviously one that only is worthwhile for very large publishers who have multiple departments wanting to advertise.

    In many cases someone like HP would probably build their own way to do that or do it with an ad server, but if AdMomentum makes that job easier, more power to them!

  • anon

    What about local search? I’d say probably 10% of the sites i look for are specific to the country I’m in – but I’m looking up that 10% because i want to actually buy something from them, visit or get in contact with them. These are the most valuable leads in marketing and also the area which Google and the other global search portals are notoriously crap at.

    I think that in order to provide real local relevancy you either have to be local or move local. For the multi-national companies this is far harder to achieve and conflicts with their international objectives. I believe this leaves the most profitable area of search advertising for the local players and eventually it’ll be the other way round – Google, Overture etc will be approaching local players for their ad networks and not the flip side we have now. Doesn’t it make more sense? Google is an aggregator of content, shouldn’t they be an aggregator of advertising too?

  • http://www.dkib.com usman ghazi

    I think Ad momentum maybe a way for certain publishers to become rivals to the major search engines in specialised verticals An example is Reed Business which is developing a B2B search engine called Zibb.com which is essentially an affiliate network of its own and third party sites. It recently bought an online market place BuyerZone.come in this space but still relies on Google AdSense for monetisation. Ad Momentum could allow it to bypass Google thereby allowing it to become the Google in the B2B space?

  • http://www.ventureblogalist.com ventureblogalist

    what do you think of adify?

    I think the sites you mention are used to facilitate the direct sales process but are complementary versus precluding using ad networks.

  • http://www.conversionrater.com/ Pat McCarthy

    I like Adify, the concept of allowing publishers to form their own networks and sell across them as great. Being a tool provider for publishers is useful to help them sell directly.

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