Why do so many publishers who’ve used Google for advertising end up moving away from these platforms? The weaknesses of Google and similar pay-per-click ad networks are abundant: lower-than-expected payouts, strict format limitations, and an overall lack of transparency. Automated ad networks like Google require a level of coordination that most digital publishers don’t have time for, especially if they’re already busy running the editorial and marketing sides of their operations.
Although digital ad networks have been in existence for decades, today’s increasingly mobile marketplace means publishers don’t have to settle for overly-complicated platforms that rarely deliver the results they promise. Direct, digital ad sales provide much stronger returns for most digital publishers today. Comparing direct ad sales to ad networks and PPC advertising makes it clear that the weaknesses of Google and other networks are abundant.
Ad networks like Google facilitate the buying and selling of ad space. They are usually open to all digital publishers, regardless of niche or audience size. With a single purchase, advertisers get access to a huge variety of publisher websites so they can reach consumers across digital channels at scale. So what’s in it for publishers? In an ideal scenario, ad networks help publishers sell more inventory on their websites with less hassle. Rather than employing a team of sales representatives to manage direct client relationships in-house, publishers who utilize ad networks like Google are taking advantage of automated bidding capabilities to hopefully increase revenue and ad efficiency. What could go wrong?
It turns out, quite a bit can go wrong when publishers work exclusively with ad networks like Google. The sheer volume of ad networks today means there is more competition for advertisers, and publishers often end up getting the short end of the stick. Most ad networks are more than aggregators, relying on technology to sort through a huge sea of available ad space across millions of publisher websites. Ad networks make money when they sell inventory at higher prices than they paid for it, with most ad networks charging a percentage of every transaction.
1. Over-Reliance on Automation
One of the strengths and weaknesses of Google and other ad networks is that they have all become increasingly automated as programmatic technology has been rolled out to the masses. On the upside, that automation is often something publishers say they want more of. At its best, automation can reduce some of the workflow and hassles involved in managing direct digital advertising. That automation also comes with some major drawbacks, though. Relying too heavily on automation leads to missed opportunities and lower ad rates for many publishers.
2. Drops in Revenue
We’ve already established that ad networks use automation to decrease the burden on publishers. With that being said, why do so many publishers end up switching back from ad networks to direct, digital ad sales?
The downsides of working with an ad network can greatly outweigh the upsides. The convenience that some publishers are expecting when they switch to ad networks like Google is usually not worth the drop in revenue that occurs once those same networks start taking a cut from every transaction. The increased targeting, reach, and scalability that are often touted as benefits can also be considered drawbacks from the publisher’s point of view.
3. Lack of Transparency
Perhaps the biggest disadvantage of working with an ad network, is that most networks lack transparency for advertisers and publishers. Prices are typically negotiated down, rather than determined based on demand, and that means most digital publishers that use Google for advertising see lower returns than those handling advertising in-house.
4. Lower Fill Rates
The relationship between publishers and ad networks is a rocky one. While it’s possible for some of the smallest publishers to sell out their inventory with ad networks, larger publishers usually only fill between 10% and 60% of their space this way. We call this remnant inventory. That space typically goes for a much lower amount than the space that publishers are selling directly on their own.
5. Working Against Publishers
No matter how much it may seem like Google is working to help local publishers, its business model is actually designed to defeat them. Google brings in more advertising revenue than all independent news publishers combined. When publishers use these ad networks, they are effectively lining the pockets of operations that are working to hasten their demise. For example, in December it was announced that Google would be blocking the ads publishers sell if they don’t meet the company’s own criteria.
Mobile ad networks are one of the fastest growing advertising segments, however they suffer from many of the same weaknesses of Google, Facebook, and other traditional ad networks. Mobile ad networks buy and sell inventory from mobile publishers. With more than 5 billion people having mobile devices around the world now, the potential market is enormous. Most mobile ad networks focus on selling inventory in mobile apps, while large media companies, like The New York Times, have their own branded mobile apps – something that’s uncommon among small, local, or independent publishers. Thus, financially speaking, mobile ad networks don’t typically make as much sense for local or independent publishers as direct ad sales.
The weaknesses of Google and other ad networks should be very apparent by now. Publishers that want the highest ROI are increasingly opting to go with direct, digital ad sales. Using in-house sales representatives and specialized ad management platforms, publishers can form stronger connections with advertisers and generally charge higher rates for the inventory on their websites.
Selling directly also opens up the door to more creative advertising opportunities. For example, publishers have the option to sell sponsored content and native content when they use specialized ad managers, like Broadstreet. Those sorts of creative ad formats aren’t available through most standard ad networks, which means publishers could be missing out on potential streams of recurring revenue.
Although there are some ad networks that support uncommon ad formats and platforms, most ad networks are specialized. That uniformity is what allows for the scale or volume of ads to be pumped out each day; however, it also means publications can begin to feel homogeneous when the same handful of display ads are running across dozens of websites in the same niche.
In the world of digital publishing, a one-size-fits-all approach rarely applies. This is certainly the case for digital advertising and website monetization, and it is one of the major weaknesses of Google and other ad networks. Choosing an advertising partner is highly personal. It’s unlikely that any single network will suit every publisher’s needs.
The most successful advertising strategies for publishers will vary based on inventory availability, audience size, audience location, and countless other factors. Most of the perceived efficiencies that ad networks provide are diminished when publishers use multiple networks or combine ad networks with direct, digital sales programs.
To learn more about how to set value for your inventory to maximize profitability at your digital publication, click here.
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