Julia Angwin’s recent Wall St. Journal article (about ads purchased through networks showing up alongside racy content) underscores the point that there could be better controls in place around network buys. One observation in particular is a point we bring up a lot around here: in order to gain access to more media, ad networks often buy and sell from each other. So, while an advertiser thinks it’s buying on Network A alone, part of its order may be placed on unknown Network B, and its ads may end up on some objectionable sites as a result.

Loss of control over where ads serve is a very real problem when networks trade inventory. This is why we’re putting so much work into our MediaGuard product. Advertisers, publishers and ad networks using the Yield Manager platform need to feel confident that content and ads within the network are being classified properly.

But while loss of control over content is the most visible problem of inter-trading between ad networks, it’s not the only one.

Why Networks Trade with Each Other
The inter-trading of ads between networks is a means for networks to fill gaps in their supply and demand. Why else would a network sell inventory to a competitor, while another buys inventory from a competitor? This practice is a way for ad networks to create a proxy for liquidity in their closed (and relatively illiquid) markets.

Networks see a compelling reason to remain closed. Think of them like ticket brokers. The great thing about being a ticket broker is that you know how much the buyer is willing to pay for a certain ticket, and you know how much the seller is willing to sell for. Neither the seller nor the buyer has information about the other (otherwise, what would they need the broker for?). The broker can sell the ad to the buyer for maximum price, and from the seller for minimum price, keeping an undisclosed (and often huge) margin.

Now what happens when your friend (who’s also a ticket broker) has the buyer as a client, and you have the seller? Well, you cut a deal and split the margin.

The Resulting Friction
Ad networks operate on different platforms, with different pricing structures, counting methodologies and other disparities. Ask enough network ad operations people and you’ll hear a horror story about an ad being brokered back and forth between two networks, each buying and selling the ad to/from each other several times in a nearly endless loop. In short, when networks sell to each other, complications abound. Controlling content of ads and sites becomes impossible. Buyers and sellers see discrepancies in reporting. Reconciling payments becomes a formidable task. When we talk about these dynamics here at Right Media, we talk about friction.

Solving the Problem in an Open Exchange
This sort of friction is eliminated when networks, publishers and advertisers share a common platform (with a single counting methodology and set of pricing structures). Today there are over 50 ad networks using Yield Manager, interconnected to all other buyers and sellers on the platform, that have open, immediate access to media and trade it seamlessly. If, at a given moment, a network lacks needed inventory, it naturally acquires more in the open media exchange (what we’re currently calling the “Right Media Exchange”). Likewise, if it runs out of paying ads, buyers are available in the exchange.

The point is that networks, like any brokers, will continue to have relationships with each other. But many are realizing that they owe it to their advertiser and publisher constituents to eliminate as much friction and uncertainty from those transactions as possible. With Yield Manager’s community linking capabilities and ever-expanding Media Guard features, we are striving to eliminate as much friction as we can.

As the exchange expands and the benefits of an open, transparent market become more obvious, there should be less reason for any of its participants to look externally to increase scale. With that, problems like ads showing up where they shouldn’t and multi-platform conflict should be greatly diminished.

In our effort to continually broaden our suite of solutions we’ve released an interstitial ad size to Yield Manager.

What is an interstitial?
An interstitial is often considered the web version of the TV commercial.  It’s an ad that is shown alone on a page before the originally requested page appears. The interestitial page contains the ad, your logo and a link for the user to skip the ad and go directly to the content.  It also has a set number of seconds before the page auto-refreshes and goes to the originally requested page.  View a demo here.

What size are the ads?
Interstitial ads are usually 720×300 and often contain the types of similar that you’d see in popup or popunder ads.  Although it’s possible to display any ad size on the interstitial page.

What CPM do they earn?
As with all Yield Manager ad sizes, each impression is auctioned off so CPMs will vary per publisher and network, but they generally pay more than any ad size except popups.

What sort of control do publishers have?
Publishers can choose the following:

• Logo used on interstitial page
• Page background color
• Text color
• Link color
• Frequency cap of interstitials per user
• Time it takes to refresh and move on to content

How do I get started with interstitials?
Getting started depends on what type of business you are.

Publishers: Log in and pull an interstitial ad tag under the pops category.

Advertisers: Let your sales rep know you’re interested in running  interstitial ads with Right Media or with another Yield Manager network partner.

Networks: Activate this new tag in your available tag sizes, let publishers know it’s available, and let your ad sales team know that they can sell it.

The other day I went to see a company that has been buying media on the Right Media Network for years. This Market Research Company acts like an ROI-focused advertiser, with conversions defined as a completed survey. The situation is more complex on second glance: surveys change frequently (more or less complex with different topics, etc.), as do their targets. Above all, the company is concerned about unduplicated reach (which should be high) for sampling validity. So the goal of ROI optimization (zeroing in on the targets) and the objective of maintaining high reach need to be re-balanced continuously.

Proposing a self managed advertiser solution is obvious. The Advertiser will gain operational efficiencies – trafficking, unified reporting and comparable data sets. They will also be able to change things on the fly at any time without having to talk to Account Managers at the ad networks. But beyond these benefits, which can be accomplished with pretty much any third-party ad server, implementing Yield Manager for Advertisers will provide them with some crucial benefits.

First off, the client will be able to control exposure globally across networks, thus giving them the ability to manage unduplicated reach — particularly important for the research client. Furthermore, the client will have instant access to the Yield Manager Marketplace — an open exchange of media for all clients on the platform. It will enable the company to evaluate all impressions across the entire marketplace (not just on the Right Media Network) and only bid on and buy those impressions that meet their goals. This drastically increases acquisition efficiencies, allowing massive scale at tightly managed ROI.

Every advertiser wants to increase conversions without violating its ROI goals. While this case study examines one campaign in particular, the story is universal across Right Media clients: moving from a static CPM to a dynamic pricing model removes typical inventory constraints and allows campaigns to deliver more efficiently.

Dynamic Pricing allows each individual impression to be priced flexibly, on every ad call, based on its true value to the advertiser. Instead of being optimized out of lower quality inventory, the advertiser can simply bid less for it. Instead of being outbid on higher quality inventory, the advertiser can offer to pay more for higher value impressions. Whatever the case, the system monitors ROI targets every time it sets a bid for an advertiser.

Goals and Method

• Goals of the two-phase test were to acquire new customers, and
• control CPA while maximizing conversions and scale.

The test looked at the performance of two ad units (300×250, pops) across two time periods of equal length (18-19 days) and scale (10-11mm impressions). The campaign was priced on a flat CPM in phase I, and a dynamic CPM in phase II.

Phase I

Not yet optimized, the campaign started at a high CPA and delivered broadly. CPA dropped progressively as the system learned and became more selective about when to serve. The campaign averaged around 9 conversions a day, and it hovered around this level as long as its static price restricted it from higher and lower priced inventory.

Phase II

Upon the switch to dynamic pricing, conversions skyrocketed. Instead of ruling out impressions of different value, the advertiser could now bid on them relative to that value, as long as its campaign targets were not violated.

Delivery increased, and the campaign garnered nearly 5x more daily signups, on average, than it did when it was priced statically. At the same time, CPA continued to trend downward as the system predicted response more accurately and got smarter about how to spend the campaign’s budget.

Summary

Once the client could pay according to value, instead of paying the same, flat price for every impression, the advertiser opened itself up to much more inventory and won considerably more new signups. Cost per user was controlled, and ROI was maximized on the campaign. While nearly every network started on the buy, only Right Media remained at the end.

Prior to joining Right Media, I held a position where one of my roles was to purchase online advertising. Our goal was to reach an online representation of the US population by placing banner ads.   

Working with an array of ad networks was at first fun and easy; we would deliver outstanding click rates and acquisition costs. However, none of these partnerships could meet my volume goals. Each network would meet a budget ceiling, and when pushed beyond that ceiling we would observe inflation in cost per action. The result would be to add additional network partners to the mix, and manage many relationships with finite deliverables. Having to manage multiple insertion orders and reporting tools, and reformat all of the networks data into one concise data sheet, became time consuming. 

Over time this exercise also impacted the overall cost per acquisition negatively. 

Yield Manager became a great resource. I was now able to access a marketplace of inventory, previously unavailable to me. I could increase my budget 100% without compromising my CPA. In addition to gaining momentum, I had a flexible reporting tool that I was able to manipulate to evaluate the metrics I valued most. 

Yield Manager was an effective way for me to manage my time, my campaigns and my focus to reach a diverse sample of the online population.