I read a report recently that said the average number of redirects on an ad call was 7. If someone created a drinking game where you had to shoot a drink every time a redirect happened (a geeky permutation of the Paris Hilton ‘that’s hot’ drinking game where you drink every time she says ‘that’s hot’), we would all be flat out on the floor drunk.

For the unfamiliar, an ad call is the action that happens when a publisher loads an advertisement into a page. The page makes a request to an ad server (a.k.a. an ad call) to load an ad. What happens from there can be complicated and troubling…all the redirecting. Redirecting is the act of making an additional ad request rather than serving a creative directly.

I started thinking about why so many ad calls are redirected. Here’s the short list:

1. An advertiser’s agency serves their ads and the agency uses a 3^rd party ad server.
2. A publisher uses a 3^rd party ad server to represent their inventory.
3. A network represents all the inventory of a publisher but doesn’t have an ad to show and passes the ad call to another network or worse, back to the publisher.
4. A publisher dictates to a network that the network can only serve if the network generates a CPM of $X.XX or higher.
5. A network acts as an advertiser buying from another network.
6. An advertiser redirects an ad call back to the publisher/network because they don’t want it (known as ‘passback’).

Here are examples of ad calls and redirects:

1. Dell buys through its agency on SuperComputerzzz.com.
2. Autozzz.com is represented by AdNetwork1. Autozzz loads a page and calls to AN1 to serve an ad.
3. Autozzz.com is represented by AdNetwork1. Ad call comes in and AN1 doesn’t have an ad to serve, so it redirects to AdNetwork2. AN2 may serve an ad or pass it to another network (AN3, AN4, AN5, etc). This is called a daisy chain.
4. SuperFastCarzzz.com lets AN1 represent their inventory, but tells them to send the ad call to AN2 if AN1 doesn’t have an ad that pays higher than $1.50 CPM. This is also called a daisy chain.
5. Here’s the really fun one……a publisher, TrainzzzRock.com, has a relationship with the TrainNetwork, who is supposed to monetize all their ads. The TrainNetwork has 20 salespeople, but none of their 140 advertisers wants to take the ad call (happens a lot) and another network AdNetwork1 purchases inventory from the TrainNetwork at 50 cent CPMs. AdNetwork1 has a click deal with a lead gen company that serves an 80 cent CPM free Coach bag ad.
6. The agency for a credit card company gets an ad call from a weather site, decides the user has seen too many ads on other sites, and attempts to redirect or ‘passback’ the ad call to the publisher.

#1 is a valid use of a redirect as the agency is centralizing the adserving, reporting and optimization for the advertiser. #2 can be valid if the publisher simply doesn’t want to deal with monetizing their inventory at all and wants to outsource it all.

#3, #4, #5 and #6 all exist because of inefficiencies in the online display market where:

1. Publishers do not have direct access to sufficient advertisers so they redirect to networks.
2. Networks do not have enough breadth of advertisers to fill 100% of a publisher’s inventory so they redirect to other networks.
3. Networks do not have enough access to publishers’ inventory so they buy from other networks to gain access.
4. Advertisers are buying from multiple, overlapping networks with no global controls so they have to do something with the ‘excess.’

This creates a number of issues for publishers. Ad delivery latency affects how quickly web pages load, so a web page may be delayed in loading for a user because of the redirects. Many publishers have solved this issue by framing the ad units so it doesn’t delay the page load, but latency causes another problem. By redirecting an ad call 7 times, the user may not see the ad. When an advertiser only has 3 seconds to make an impact on a user, latency hurts.

At a higher level, all of this redirecting hurts the publisher’s bottom line. In example #5, the advertiser that appears on TrainzzzRock.com is paying a gross CPM of $0.80, but because of the financial relationships of the networks and deal slicing, the publisher would likely see less than $0.15 CPM.

Lastly, advertisers/agencies are hurt by the overlapping access to inventory redirecting creates. If an agency buys from 5 networks on a Run of Network basis, each network will traffic the agency’s redirect tags into their ad servers. Then, because networks buy from networks and networks buy from many of the same publishers, the advertiser may appear on a publisher 5x more than it really should because the agency is running through 5 different networks, each having no sense of what the other networks are serving.

One exchange for digital media improves macro efficiency by enabling direct connections. Buyers and sellers of online media can connect directly and reduce the massive redirecting and inefficiency in the marketplace.

A publisher or their representative network will connect directly to an advertiser or to the agency. More revenue will go directly to the publishers and/or to the networks directly representing them (more here). Advertisers/agencies will be better able to control frequency, recency and pricing globally (which obviates the need for passback).

As the exchange concept takes hold, we should see the number of redirects decrease with more value going directly to the publishers. If you’re playing my redirect drinking game, you won’t be so drunk either.

There was a good post today on the Signal vs. Noise blog that fits our current product development situation with RMX Direct pretty well.  The post is about customers outgrowing their products, and their decision to let customers do that.  Instead of adding more features to keep those customers, they don’t want to compromise the application to satisfy those customers because they don’t want to risk making their application too complex for new users.

Even though RMX Direct itself doesn’t have customers yet, I already anticipate from our past publisher experiences at Right Media that there are many things that publishers want that we won’t have in RMX Direct.  These are things like controlling budgeting and pacing of directly sold campaigns, having lots of pricing options on campaigns, and other advanced controls.

Of course it was a conscious decision to make this an easier application without those features, so I think we’re doing the right thing by leaving them out.  It’s just not human nature to not provide things that others want when you’re trying to please them.

Overall though, I think we’re getting it as I’m proud of all the stuff we’ve left out, and how few different screens and pages the application has.  It’s funny how making something simple can be hard.

ClickZ reported on a new study by Ben Edelman that details how pornographic ads can pop up where they shouldn’t: