Ad Network & Exchange Guide 2009

Help Is Here for Publishers Looking to Boost Ad Yield

Stop Worrying About Commodity-Inducing Exchanges. Companies Such as Yieldex, Admeld Are Optimizing Unsold Placements for (Relatively) Small Fees

By Published on .

NEW YORK ( -- Listening to some publishers, one would think the only thing worse than a CPM-eroding ad network is a commodity-inducing ad exchange. Such entities, the argument goes, not only disrupt years of relationships and selling practices but tend to tilt the playing field away from the less tech-savvy publishers and toward arbitragers -- another dirty word -- who aren't shy about shaving pennies, if not dollars, off the publisher bottom line.

Larry Allen, Yieldex president
Larry Allen, Yieldex president
Help is on its way, however, in the form of companies and platforms that focus on optimizing a publisher's online ad yield -- and they use the same types of sophisticated platforms and algorithms that are squeezing publishers on the other side of the equation. Though they take different approaches -- in particular, some are more like neutral tools, while others look and feel almost like exchanges themselves -- companies such as PubMatic, AdMeld, Rubicon Project, Yieldex and others are helping publishers match others in efficiency and automation.

The basic concept is this: Publishers add a bit of code to their unsold ad placements, and the optimization companies call out to a variety of networks and exchanges to determine which source will make the most money for the publisher. The platforms also include tools for analyzing and optimizing yield, including using targeting data or bundling impressions to boost performance. In short, using some technology (usually accessed through a web interface) and some services, such companies can do for a relatively small fee or revenue share what it would take publishers a staff full of dedicated analysts to duplicate.

PubMatic, for instance, traditionally has worked with smaller sites such as Technorati, and Flixster but recently unveiled a "premier" version for large publishers. It says it can increase the yield of unsold inventory as much as 30% to 70% when compared with simply releasing those impressions willy-nilly to ad networks. On the fly, PubMatic looks at every impression across 50 different dimensions (including price, page context and frequency counts) to get publishers the highest possible price for the inventory, said Rajeev Goel, CEO of PubMatic. The company also maintains relationships with, and is already integrated, into a stable of ad networks.

"For our customers, there are so many ways and models to monetize their inventory -- direct, agency-buying systems, exchanges, ad networks, site rep firms -- and in each of those categories, there can be dozens or hundreds of players," Mr. Goel said. "We don't make a market ourselves but look across other, fragmented portions of the market and assure they always get the best price possible. No ad-operations person at a publisher can do what we do."

'Efficiency and transparency'
Fellow publisher broker AdMeld tends to work with fewer, larger players, focusing on maximizing revenue for sites such as Huffington Post, which recently said it increased revenue from ad networks 200% using AdMeld. Its technology freed HuffPo's internal sales team to focus on premium direct sales rather than remnant relationships, said James Smith, Huffington Post's chief revenue officer. Such gains are possible by turning unused inventory into "premium remnant" by infusing previously unwanted impressions "with data and attributes that advertisers will be willing to pay much more for," said Ben Barokas, AdMeld chief revenue officer. "A lot of that is about optimization, but for it to work really well, it requires a whole lot of efficiency and transparency to occur as well," something today's ad networks aren't particularly known for but more open exchanges can help enable.

Bridging the Long Tail play of PubMatic and the premium focus of AdMeld is Rubicon Project, which while playing up the publisher helper angle also admits to bigger ambitions: "We are the exchange Right Media was trying to be," said Rubicon CEO Frank Addante, adding that Rubicon works with 1,400 publishers, including USA Today, The Washington Post, Newsweek and The New York Times. In most cases it is exclusively managing 100% of their unsold advertising space. Rubicon also is integrated into hundreds of ad networks. All of that adds up to 40 billion ad impressions per month touching half a billion unique users, a reach that puts it just behind Google and Yahoo, Mr. Addante said. In addition to optimizing publisher yield, Rubicon consolidates payments for publishers -- "another nightmare," he said -- taking a 15% cut on transactions running through its platform.

Ben Barokas, AdMeld chief revenue officer
Ben Barokas, AdMeld chief revenue officer
"I blame publishers for all the problems they've had with ad networks," Mr. Addante said. "Publishers haven't done a good job managing their channels for unsold inventory. Typically they'll just sell as much as they can at whatever price they can. And some of that will get sold for less than fair market value."

While optimizers such as Rubicon have exchange ambitions, at the other end of the spectrum are players such as Yieldex, which will help publishers manage remnants but focus on providing more tools to help sales staffs better package and sell their premium inventory, said Larry Allen, Yieldex president. Yieldex launched in April, naming Martha Stewart Living Omnimedia -- a company well-known for aggressively attacking the commoditization of online ads -- as its first publisher client. MSLO will use the tool to build ad bundles, optimize rates, and forecast future inventory and revenue.

"We're definitely focused on helping the direct sales channel, helping large and sophisticated sales teams sell smarter and satisfy requests from marketers," Mr. Allen said. "Once that has occurred, and there's other inventory they're having a hard time selling, we can help assess the value of that inventory and compare that to what they'd get from their network partners."

Most Popular