It's time somebody said it, so I will: I'm really tired of the "my ad network is bigger than yours" mentality that positions reach and unique users as some sort of important benchmark by which all ad networks ought to be measured. It's childish, misleading, and just plain dumb.
You see it parroted in news stories both online and off. Industry trade publications regularly and faithfully report on the top reaching networks every month, as if they were providing some sort of vital news coverage that could be considered actionable for online marketers. ("Ooh, look! Microsoft packaged all its networks together and now Platform-A is being given a run for its money!")
We need to find a better way of measuring the effectiveness of ad networks. The reach numbers against the total online audience are basically meaningless. It's not as if major online advertisers are investing enough in any one network to achieve the type of reach claimed by the likes of Platform-A (90 percent of the total web audience). To do so would be absurdly wasteful.
Maybe we should rate them against a new measure of unique reach. Not reach to unique users, but reach to unique users who can't be reached with any other ad network. That might be useful. Better yet, let's rate them on renewal rate, so we can get an idea of who is servicing their clients well. Just about anything other than reach and unique users would suffice.
There are a number of reasons why the reach numbers are essentially irrelevant to the discussion:
- Most publishers use more than one network. From a major publisher's perspective, the name of the online inventory game is mitigation of risk. If you're going to use ad networks at all, it makes sense to use more than one. Different ad networks have different relationships and differing levels of access to advertisers and agencies, so casting a wide net means there's a better chance of selling inventory that would otherwise expire and generate no revenue. As a result of widespread risk-sharing, there are a ton of networks out there selling the same inventory. The fact that inventory liquidity is on the rise due to the (often undisclosed) purchase of ad inventory on exchanges means that ad inventory is homogenized even further.
- Nobody we know plans against the entire web audience, anyway. There are very few advertisers who answer the target audience question with, "We want to reach anyone and everyone on the web."
- Just about anybody can start an ad network. And with aggressive affiliate development and some sales success stories, it wouldn't be too difficult to break into the top 50, either. Inventory and reach are cheap. The expensive part is making sure you're reaching the right people. My evidence? Everybody from advertisers to agencies to technology companies is getting into the data business, building cookie pools corresponding to data profiles of people within various important target audiences. Once scale is achieved, they go out and look for those cookies by purchasing the ad inventory to reach them via ad networks and exchanges. The value proposition for networks has thus totally changed, brought about largely by the fact that it doesn't take much to get into the network business.
So why are we still pretending that the ultimate differentiator for networks is still reach and unique users?
Tom Hespos is the president of Underscore Marketing and blogs at Hespos.com.
