Publishers and advertisers can benefit from taking a vertical -- rather than horizontal -- approach to ad networks. Jumpstart's CEO explains where the strengths and differences lie.

Publishers and advertisers can both benefit from taking a vertical -- rather than horizontal -- approach to ad networks. Jumpstart's CEO explains where their strengths and differences lie.

As more money flows into online advertising, there has been a renewed debate about the value of ad networks. I personally have no doubt that leading "horizontal" ad networks, such as ValueClick and Burst Media, provide tangible benefits to both advertisers and publishers. Large ad networks aggregate and sell remnant publisher inventory; providing a valuable revenue stream to many publishers, as well as convenience and scale to advertisers. But there are limitations to the horizontal model. 

In a recent iMedia article, Two to Tango-- Publishers and Ad Networks, Doug Weaver states, "I can't tell you that I've heard a publisher rave about the business they get from a network. You won't hear them gushing about the level of individual service or the whopping CPMs they're getting. But I think most publishers understand that, in the end, it's a relationship of convenience."

This isn't the case with a vertical ad network. Unlike horizontal networks that collect a wide variety of sites from different categories into a network, a vertical network consists entirely of sites within a specific industry category. In our case, it's automotive, but it could also be healthcare, technology or even weddings. Ad networks that focus exclusively on one industry can create significant scale of a highly desirable audience across many strong publishers. This results in characteristics not found with horizontal ad networks, and significant benefits to both publishers and advertisers. 

Publisher benefits
From the publisher's perspective, while a larger horizontal ad network might provide the opportunity to monetize some of its unsold/remnant inventory, a vertical network partner delivers complete inventory management, solid sales representation, strong ad ops and industry expertise. Most importantly, because the vertical ad network can aggregate a highly desirable audience into significant scale, it can generate a higher CPM for its publishers than if they were to leave the network and go it alone. Publishers in a vertical network can generate lucrative and immediate returns without the financial or management burden of staffing and managing a sales, account management and ad ops team.

Another important distinction between the vertical and horizontal network is the depth of the relationship with publishers. Most vertical networks, Jumpstart included, end up being true business partners with their publishers, helping with site design, content development and ad program development, among other roles. Further, the relationship between the vertical ad network and a publisher is typically long-term and exclusive. In the Two to Tango article, John Rogers of Advertising.com points out that there aren't too many exclusive relationships between networks and publishers out there; most publishers use a multitude of ad networks. This isn't the case with the vertical ad network, whose focus on one specific industry allows them to have a much deeper and closer relationship with their publisher partners. For example, at Jumpstart we've been working closely with NADAguides for more than five years, with Vehix for more than four years and with eBay for more than three years. These are valued business partners with whom we speak daily. 

Advertiser benefits
From the advertiser's perspective, a vertical network can cater to its specific needs with a greater amount of expertise and intelligence, as opposed to purchasing an endemic "channel" on a broader network. With the vertical network, an advertiser can get scale and access to many great publishers through one source-- making life easier for the already overworked media buyer.

A vertical ad network also brings intelligence to its advertisers. In our case, we understand the automotive industry completely-- from supply chain to dealer relationships to residual values and flooring costs. This industry knowledge allows us to bring solutions to complex marketing problems and bring a consultative approach to our advertisers. Sara Nelson, senior media planner for Saatchi & Saatchi LA (Toyota) says, "A vertical ad network brings reach, industry expertise and transparency to where the ad is running. Rather than having to develop relationships with many publishers who may not be experts at selling and managing digital ad campaigns, I can work with one company who knows what they are doing and who helps me deliver results."

Growing prominence of the vertical ad network
With the ever-growing number of publishers and audiences that are becoming increasingly fragmented, there is a need for the horizontal ad network. They provide an important revenue stream to many publishers, as well as scale and convenience to advertisers. But a new business model is emerging among these aggregator networks. The vertical ad network, especially in key advertising verticals, brings considerable benefits to its publisher and advertiser partners. Rather than being "a mile wide and an inch deep" like the horizontal networks, a vertical ad network's approach of being "an inch wide and a mile deep" brings focus, industry expertise and best practices that translate to higher revenue for publishers and better results for advertisers.