Accipiter's VP of product strategy lists ways publishers can maximize profits while serving small and medium-sized businesses.

Small and medium-sized businesses (SMBs) are the fastest-growing segment of advertisers in today's online marketplace. While hundreds of thousands of SMBs are advertising online, most publishers are not yet able to effectively serve this diverse and fragmented market segment. The transaction costs associated with finding prospective advertisers, negotiating contracts, as well as providing support and reporting for campaigns, can be significant. Many sales executives have given their ad sales teams very clear instructions to ignore opportunities that fall below a certain threshold. In this scenario, small and mid-size advertisers are simply shut out.

An alternative approach is to join a self-serve ad network and let that network sell your inventory for you. In an ad network, advertisers create their own accounts, write their own ad copy, define targeting, pre-pay with their credit cards, and use online reporting tools to get the information they need to improve and optimize their campaigns. Each network has its strengths and each aims to differentiate itself from the pack. However, they also all have something in common: they take ownership of the advertisers and pay you some portion of the revenue. While this model provides many publishers with an easy way to fill unsold inventory, it's certainly not for everyone.

When a publisher relies on a self-serve ad network to reach an entire market segment of advertisers, that publisher hands over those valuable advertiser relationships and in the process, helps that ad network build its business. If you are a small publisher with no ambitions to sell directly, then a self-serve ad network may be the appropriate choice. However, for larger publishers, this represents a deeply uncomfortable choice: turn away business or send those prospects over to an ad network and capture only a portion of the value. 

Thankfully, new tools are available that will dramatically reduce the transaction costs associated with serving the SMB advertiser. These new self-serve bid-for-placement advertising solutions can operate entirely under your own brand and appear to the client as an in-house program. With the right tools, you can take back control, develop new advertising products, capture new revenue, leverage your brand and sell on your own terms to the fastest growing segment of online advertisers.

When analyzing the tools now available on the market, consider the following factors: 

Ownership
Direct relationships with your advertisers are priceless. Forging strong, direct relationships is an invaluable endeavor as it will increase your value over the long term. The right technology solution will allow you to package your inventory however you wish, set your own pricing, communicate effectively with your new clients, receive payments directly, and capture more revenue. Your technology partner should be focused on growing YOUR business and provide you the tools and expertise to do so. 

Percentage of revenue share
Most publishers are leaving a significant portion of money on the table when dealing with a traditional ad network, often 40 cents on the dollar or more. Worse, some self-serve ad networks will not even disclose their revenue share terms to the publisher. If it's your inventory and your advertiser, you should expect to keep the lion's share of revenue. If it's the ad network's advertiser on your inventory, you should be paid an equitable rate. If you choose to go with a technology solution rather than an ad network, make sure that you can book 100 percent of the revenue as your own.

Brand leverage
The value of your brand is often lost when using a conventional ad network. Advertisers will pay a premium to be associated with your strong brand and content. With blind networks, your brand disappears and your brand value dissipates. Find a solution that lets you leverage your best asset. Furthermore, make sure that the technology solution gives you the flexibility to create ad units of any size or design.

Cost of sales
An automated self-serve advertising solution can help you effectively manage your relationships with hundreds of advertisers. You can create an ad marketplace that is scalable and easy-to-use, resulting in no time wasted on negotiations or paperwork with smaller advertising clients. Ultimately, you can reduce your cost of sales, freeing up your sales team to focus their time on your highest value clients. 

Competition for ad inventory
A bid-for-placement model and real-time auction system forces your advertisers to compete for access to your most valuable ad inventory. A well-designed auction reduces the transaction costs associated with negotiation because competition automatically drives up prices. A little competition is a good thing. A lot of competition is a magical thing. Ask your technology vendor what they can do to help drive competition. Do they have a ready pool of advertisers that you could invite to bid?   

Level of control
It's your site. It's your advertising program. You should have complete control over how it operates. While you need the ability to review each and every ad to be placed on your site, you also need a system that reflects your business rules. If you have an existing sales team, you may need to provide incentives for them to promote this new advertising program. Does the technology offer a way to track sales back to individual account managers and calculate commissions? Can you offer different levels of access to different users in your organization? Think about your business rules and ensure that the vendor's product is flexible enough to power your business.

You have options!
Publishers now have options. You do not have to choose between turning away and giving away good business. You can take advantage of the opportunities provided by small and mid-size advertisers. These advertisers represent half of the economy and are largely responsible for the dramatic growth of the online advertising industry. These advertisers may be individually small, but together represent a tremendous opportunity for publishers who possess the tools to efficiently and effectively service them.

Paul Needham is vice president of product strategy at Accipiter. Read full bio.