NEW YORK (AdAge.com) -- Blind faith.
It's not the way many do business, particularly in an age of return on investment and a stinging recession. But for one online-advertising start-up, that kind of faith -- among buyers, sellers and publishers -- is what's needed to help prop up declining costs per thousand and dwindling sell-through rates.
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It's the only way to get premium publishers comfortable using networks again, especially as a worsening economy and increase in supply leads more top inventory to go unsold, said Brand.net CEO Elizabeth Blair.
"I completely respect the direct-sales model, and if [publishers] can't make that model work, they're not going to be able to stay in business, and that's bad for the internet," Ms. Blair said.
Virtually every publisher faces the problem of unsold inventory. But recently some publishers have cut back on their use of ad networks to get rid of that unsold inventory. The problem, according to those publishers, is that when third parties sell ads, it creates competition and ultimately drives down pricing -- especially as ad networks charge less than a publisher would.
So-called blind ad networks such as Brand.net have been around the online-advertising industry for a while, but they have typically had more success catering to marketers that have a higher tolerance for risk and generally care more about how well their campaign performs than the type of audience and environment it reaches. But the Brand.net pitch is going to more-risk-averse brand advertisers.
Advertisers, of course, need some information on where their ads are running and that the inventory is safe -- that the ads won't be next to videos of bloody street fights or comments laced with vulgarities. To address that, advertisers get a list of top ComScore sites in genre-based buckets. Brand.net does not say it has buying relationships with any publishers on the list -- only that the buy will include "sites like these." It has also launched a grading system, based on how the site content is organized, where the user-generated content is and whether it's moderated.
A site with only professionally created content gets an A ("most safe"), while a site with moderated comments gets a C. A site with highly dynamic or un-moderated forums gets an E ("most potential for some crazy UGC to surface"). Brand.net matches an advertiser's tolerance for risk with a publisher's grade and then uses the same technology that corporations use to block and monitor employee use of certain internet sites to scan every page at five-minute to 24-hour intervals to ensure something untoward hasn't snuck onto it.
"The technology is somewhat promising," said Andy Chapman, co-head of the Exchange at Mindshare, who has used the network. "There's more pressure on us and our partners to make sure we understand where this stuff is running and catch the occasional problem before it happens."
Brian Leder, VP-digital director at MediaVest, said he likes that he can dial up or dial down the user-generated content, depending on a brand's sensitivity. "Our clients have to be in areas where they're comfortable with the content," he said.
Brand.net's operation is only one approach helping woo publisher inventory back to networks. Another, even newer network is Short Tail Media, whose philosophy is that transparency as to which sites are in its network is key. But it lets participating publishers create "block lists" of advertisers to whom the network can't sell because the publisher already has an important relationship.
"Portals are taking 75% to 80% of the ad share," said Short Tail CEO David Payne. "They're buying the ad systems, the behavioral companies, the ad networks, the end-to-end complete solutions -- which leaves these premium online publishers where they're at a disadvantage to the Big Four [Google, Yahoo, Microsoft and AOL]. Unless you find new strategies to band together as a group, [the portals] will always be bigger and have better technology."
Most networks targeting brands and premium publishers have a philosophy that lies somewhere in between that of the blind Brand.net and the transparency-focused Short Tail.
"We'll work with an advertiser on a custom basis to give them the comfort and the transparency they need but up to the point where we could hurt a publishers' business," said Mike Cassidy, CEO of Undertone Networks, another ad network in the space. "We won't take a short-term media buy at the expense of losing a publisher."