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OPA Ad Effectiveness Study: It's Not That Black and White

Most Clients Buying Ad Networks Are Focused on Different Metrics

By Published on . 2

Rajeev Goel
Rajeev Goel
The Online Publishers Association released a study that showed that advertising placed by ad networks -- some of which runs on premium publisher websites, some of which does not -- is not as effective for branding as ads that are sold through those same publishers' direct sales forces. While the conclusion of the study makes sense with respect to marketers with branding objectives, most campaigns purchased through ad networks have fundamentally different objectives.

First, my company, PubMatic, and many others operating in digital media support the OPA, and I do not dispute the findings of its report. It makes perfect sense for brand advertisers to place their advertisements in the surroundings of premium content when it is economically feasible. Moreover, branding campaigns purchased directly on premium websites often have the added advantage of customized ad products such as roadblocks, different ad units or immersive environments.

However, for performance-driven campaigns in which the marketer is seeking specific ROI metrics based on clicks or conversions, purchasing inventory from a premium publisher's sales force may not provide the best bang for the marketer's buck. Branding campaigns and performance-driven campaigns have different success metrics, and therefore require different solutions with respect to being placed directly on a premium website or via an ad network.

While publishers prefer that all of their ad space is filled with higher-CPM branding campaigns, the reality is that very few publishers can fill all their ad space with those. Similarly, advertisers don't always want to pay the higher CPMs for certain campaigns.

Generally speaking, premium publishers -- the type of publishers that are OPA members and are referenced in the study -- have two ad-sales channels. The first channel consists of guaranteed-delivery ad inventory sold directly by the publisher's sales force. The second channel, which is sold through intermediaries such as ad networks, consists of non-guaranteed-delivery ad inventory often sold at lower price points.

The campaigns the OPA refers to in its report are branding campaigns sold from the first channel, with guaranteed delivery around premium content. The ads that performed poorly were not in the same environment and may not have been purchased for the purpose of providing brand lift. If direct-response ROI metrics had been part of the study, the results likely would have been better for ad networks. More importantly, premium publishers cannot ignore the fact that more and more of their revenue is coming from the second channel, as inventory continues to grow and audience targeting improves.

Regardless, it is not as black and white as it may seem. Branding campaigns should not just be for directly sold premium publishers alone. For instance, the recent campaign promoting Microsoft's Bing search engine used direct-sold campaigns for brand lift and recall reinforced by a massive campaign with reach and performance metrics that only ad networks can provide.

The silver lining: Publishers can earn money from both Microsoft objectives. Had Microsoft purchased all of the impressions through direct sales forces instead of a combination of both premium campaigns and ad-network campaigns, it likely would have spent less money advertising Bing online and would have achieved far fewer benefits.

There is no argument that in a perfect world premium publishers would have a 100% sell-through rate from their sales forces. However, in a world where sell-through rates are lower, ad networks can provide incremental revenue to publishers by selling a different objective to marketers. Premium publishers should always keep in mind what is best for the advertiser as well as themselves so that both sides can meet their objectives. In this rapidly changing economic environment, publishers need to focus on improving revenue from their first and second ad-sales channels.

ABOUT THE AUTHOR
Rajeev Goel is CEO of PubMatic, which helps publishers manage their ad inventory. Previously he was senior director of product marketing at SAP and has a background of advising technology clients and launching startups.
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