Jason Calacanis tossed a grenade into the burgeoning field of online ad networks in a guest post on Silicon Alley Insider.
The question comes down to Long Tail economics in a mass audience world. How can a small, but strong “niche” site, get paid for its pageviews without assuming the massive cost structure of its own salesforce and ad ops team?
How can a mass site move its unsold remainder inventory without devaluing itself?
The answer is ad networks, but Calacanis writes:
“I’ve never liked the ad network business. They’re a very short term solution and they are very damaging to high-end publishers because they create massive channel conflicts (i.e. many people selling your inventory confusing advertisers), they run horrible ads that people hate (think punch the monkey), and the space is filled with dishonest players (i.e. they promise to not run certain types of ads… but they do).”
Calacanis points to ESPN.com’s decision to drop the network model. And this morning, my colleague Gary Milner points out:
MediaPost Publications – Forbes Joins Ad Network Fray – 03/25/2008
“THE GROWING CROWD OF VERTICAL ad networks got bigger Monday, with Forbes announcing plans to launch a network spanning more than 400 business and financial blogs.Forbes is among the latest media companies trying to squeeze ad dollars from the Internet’s long tail by aggregating niche blogs and Web sites around specific categories and selling targeting advertising across the sites.”
From an advertiser’s point of view, networks are convenient touch points for achieving broad reach with a low “relationship task” — it is unwieldy to negotiate and deal with insertion orders on a site by site basis. Sure, I like dealing directly with the publisher, but it simply isn’t feasible with a tight staff to develop and own relationships with dozens of media properties.
On the other hand (a weasel world I despise), I don’t want to see my brand in the company of Lowermybill’s roof dancers, the punchable monkey, and the other bottom feeders that dominate the display/banner advertising space. There’s a reason one doesn’t find those ads on the higher quality sites, and that’s because those sites have invested in their own sales teams and have the traffic and audience to justify the relationship cost.