Buying advertising from ad networks versus individual websites: Which is the better approach?

Online advertising networks have been around for a long time, but they've recently seen a resurgence. An increasing number of website owners are selling their inventory through ad networks now, which I think is due to several factors. Targeting on ad networks has gotten better than it used to be, social media has increased the amount of ad inventory (particularly what I'll call "non-premium inventory" because ads on social sites typically have much lower click-through rates and engagement rates), and advertisers are more likely to pursue The Long Tail of their audience.

From an advertiser's perspective, should you be running your ads on a network or should you deal with individual sites for your buy?

First of all let me say it's a complex question that depends a lot on your particular targets, the types of sites in your market, and a number of other factors. But whenever possible, I believe advertisers will get the best value for their advertising dollars by dealing directly with sites that reach their target market, rather than buying inventory from an ad network.

This is true because most site owners know their audience well, and they can make recommendations for how to reach the audience more effectively. Sure, there are lots of site owners who aren't willing to help you, might not want to give you insight into their audience, etc. But I think the majority of online publishers realize it's a win-win-win when they work closely with advertisers. Their audience is better served by seeing ads that are more relevant, the advertisers are happy because they're getting better performance, and the publisher is able to keep its advertisers happy which leads to repeat business.

For example, at IndustryWeek we see both types of advertisers: The ones who truly want to partner with us on a campaign and really care about making their campaign fit the site's audience, and also the advertisers who are buying ad inventory and applying a one-size-fits-all approach. I'm sure you'd expect to see the former group's campaign results outperforming the latter. But I'll bet you'll be shocked when I tell you how dramatic the difference can be -- it's often 10 times better! That's right...if an advertiser does a good job customizing its buy, creative approach, and watching and optimizing the campaign, they can get 1,000 click-throughs on an ad when other advertisers might only be getting 100 clicks. It's all about being relevant to the site's audience.

A lot of media buyers -- whether they're buying for their own company, or working on behalf of an agency for a client -- say that online ad networks are important because of scale. They might say, "We'd need to buy from dozens or even hundreds of individual websites, and it would be so cumbersome that it's much easier to deal with an ad network." This is certainly true, and I'm sure there are lots of advertisers who run into this situation. In many of these cases, ad networks might be the only way to effectively deploy a large-scale ad buy. But before you opt for a network buy, think about that 10x return I mentioned in the paragraph above. If you're able to get ten times the return for maybe two, three, or five times the work, often it makes financial sense to opt for the more custom, more personal relationship directly with websites -- even if it means throwing more resources (time and people) at the campaign.

Wilkes University's super-targeted ad campaigns, and can they work online?

You may have heard about Wilkes University's unconventional ad campaigns. This is the second year the Pennsylvania school is using super-targeted ads aimed at a handful of top seniors. It's placing ads like "Scranton High senior Nicole Pollock: Our goal at Wilkes University is to be as much a mentor as your mother has been. (Now, if we could only make her ravioli.)" These ads are appearing on billboards, on TV, and even on pizza boxes. See AP article here, NPR story here (audio), and one of the TV commercials embedded below (also linked here).


These are the first college advertisements I've ever seen that don't make me yawn. They're smart, they convey the intended message (Wilkes cares about getting to know you as a person), and they clearly generate a lot of buzz in the community. Of course, their effectiveness at recruiting some of the top talent to the school is just one facet of the campaign's objectives. They're meant to get those students' friends, classmates, teachers and staff, and members of the community to talk about Wilkes -- and to get this lesser-known school on many Pennsylvania seniors' short lists.

It got me thinking about customized online ads. There's the "Find a mortgage in insert your community name here" ads that you see on many sites today. Those are customized based on your IP address and other technology that helps the ad figure out your location. The first time I saw one of them, it made me say wow, but it also creeped me out in a way too. It seemed a little big brother-ish, even though the site really doesn't have any personally identifiable information about me. These types of ads aren't even in the same league as the Wilkes ads, but they came to mind first.

Then you have some of the more targeted campaigns that I've occasionally seen in the B2B world. A while back, one of my colleagues got a direct mail piece. If I remember correctly, it was in a plain, hand-addressed envelope. Inside it had an invitation that had a customized URL with his name as the subdomain (for example, http://johnsmith.xyzcompany.com). When he went to that particular URL, the page was customized with his name, our company name, and a demo or pitch for a product that was somewhat built around him. After he showed it to me, we discussed it for a while and tried to figure out how they had built the program. It seemed like the kind of campaign where they had taken a list, micro-segmented it down to a couple hundred prospects they were interested in pursuing (either that or they spent a lot of time and money to make it seem that way), set up the custom URLs which probably took a little time but I'm sure was database-driven, and then of course hand-addressed the envelopes to get the personalized factor on the outside too.

Wilkes' ads make me think about the concept of The Long Tail and how the Internet is enabling companies and organizations to pursue a niche strategy. Although Wilkes is using mass media, the university is using it in a much more targeted manner than the "photo of the three students sitting under a tree with laptops" that's prevalent in most college ads. The Wilkes approach is an interesting combination of a Long Tail strategy but in a mass media way. I have a feeling many other companies and organizations will be experimenting with this type of ad campaign soon.