Ad Networks Standing Out from Google and Facebook’s Dominance
Google and Facebook’s Advertising Duopoly Means Networks Need to Double-Down on Securing Top Publisher Relationships
Venture capital funding in the adtech space is dropping, according to analysis done by Crunchbase. Likewise, ad revenue is also being dominated by Google (growing 20% YoY) and Facebook (growing 62% YoY) according to Kleiner Perkins, while the rest of the industry lumbers along at a 9% growth rate. So how do networks carve out success and grow at a scale that turns heads?
The answer lies in understanding that ad networks – much like businesses in the sharing economy – are multi-sided business models. Obviously, brands and agencies that buy ads are still the customers, but the supply chain comprises publishers and affiliates, which hold the keys to the inventory that enable networks to survive and thrive.
Publishers and networks form a symbiotic relationship so any way to accentuate that relationship creates a win-win scenario.
With Facebook and Google getting better at demoting advertising and rewarding original content and the propensity of ad blockers, networks need to consider how better to partner with publishers and stand out to engage audiences.
Identify Top Publishers
Google and Facebook excel at scale, which has allowed them to dominate the market. That said, the chink in their armor is their inability to give special treatment. Publishers don’t want Google and Facebook to win outright any more than networks do. They don’t want to be beholden to one or two major ad partners. That’s why many still make deals directly for their best inventory. That’s an opportunity for networks to strengthen the relationships they have as well as nurturing publishers that are going to be on the cusp of becoming top-tier.
Team Up with Publishers to Innovate
Once you know who top-tier publishers and influencers are, networks have an opportunity to introduce new forms of promotion. We see it today from content networks (e.g. Content.ad, Outbrain, Taboola) that bring a more native feel to their ads and companies like StackCommerce that are mixing advertising, content, and commerce into an offering that rewards the publisher and the brand. Multichannel networks (MCNs) like AwesomenessTV and Jukin Media are also pioneering the influencer space (beyond traditional means) by treating content creators as publishers, even if those publishers don’t even own a website to advertise on. Getting creative with these models is good for adtech as it continues to evolve to how media is consumed.
Full disclosure: Content.ad, StackCommerce, AwesomenessTV, and Jukin Media are Tipalti customers.
Stay Lean and Mean
Ad networks need to start thinking of themselves as platforms facilitating advertisers and audiences. Platforms are inherently streamlined. That’s what makes them effective, efficient, expandable, and scalable. That includes the complex nature of paying publishers and affiliates, globally and across varied payment methods. Many networks choose not to expand their publisher-base because this seemingly simple task becomes an operational – and increasingly manual – quagmire. According to our research, 95% of publishers expect to be paid on time to ensure loyalty, however only 38% were completely satisfied with the way their payments were currently being handled. That truly hinders the relationship. In fact, 69% are ready to drop or have already dropped a network due to a payment issue.
By solving publisher payments and providing a world-class payment experience, networks can focus on identifying key publisher partners, increasing their inventory, and offering more quality audiences to advertisers – rather than dealing with payments and issues related to payments.
Reward Ad Partners
To distinguish themselves from the competition (including Facebook and Google), networks can look to build perks into the publisher or affiliate relationship. For example, offering an early payment instead of traditional Net-15 or Net-30 terms can be mean a lot for a publisher that’s looking to maximize their cash-flow. Other ways networks can improve the publisher experience is offering to reduce fees, provide alternative payment methods that have lower fees, or paying on certain thresholds that make fees more palatable.
Let’s say a publisher has been used to getting paid through PayPal. If PayPal was the only payment method you offer, that would make sense. But if you were able to offer ACH or Global ACH / eCheck, the cost to send a payment is likely significantly less.
For an early payment, let’s say the publisher is due to make $5,000. However, if you offer to pay them today instead of a month from now in exchange for a modest discount, that’s a unique offering not every network can provide – thereby enhancing future loyalty.
The ad tech space is still wide open if networks can get creative, perhaps more so with Google and Facebook’s dominance. Just because Starbucks and Subway are everywhere doesn’t mean there isn’t room for different food experiences. In fact, you can almost thank those two giants for making consuming media the expectation, thus enabling other networks to fill in with greater, high-value experiences that go beyond the standard engagements.