Choosing an ad sales outsource service provider is a crucial decision for content publishers. With so many disappointing attempts, this series of posts outlines pitfalls to avoid. With two case studies, see how big names can actually mean lower ad revenue.
Ad Sales Outsource – Choosing the Right Partner
When searching for an ad sales outsource partner there are many aspects to consider. Between programmatic and direct ad sales, through emerging ad technologies, and on to contractual complications, it’s a tough decision. Most of all, it’s a crucial choice because you would be handing over a core part of your business to an external partner.
Yet while publishers diligently interview and filter alternatives, often these partnerships fail and do not last. The hopes for higher ad revenue collapse, the promised personal service vaporizes, and the search starts all over again.
Looking at the experience of hundreds of publishers, it seems that there are several common mistakes for publishers who hire ad sales outsource services. In this series of articles here on the Adnimation blog, we will review some of those mistakes, hoping it would help publishers to make better decisions.
The Big Name Promise
Publishers who understand that they want to focus on content and hire professionals to manage their ad sales seek a reputable partner. It makes sense. Choosing a name you’ve known before calms your mind. Hey, I can trust a well-known brand.
The problem is that sometimes the company’s name is known for something else and not as an ad sales outsource service provider. Think about it. Knowing a brand doesn’t necessarily mean that the reputation extends to all other services. Would you open a bank account with Coca Cola?
And so, before rushing into a service agreement with a known company, first check what is known for. If it is known for owning a major website – that’s a big no no. Let’s explore two case studies of publishers who partnered with big names for their ad sales outsource service hoping for high ad revenue.
Case Study #1: USA Today and Direct Ad Sales Outsource
I had the pleasure of working with a publisher who handed all ad sales to USA Today. No doubt, USA Today is a serious website with many millions of readers. Certainly, they have a strong ad sales team and they know their business for both programmatic and direct ad sales. Naturally, it felt good to come under their umbrella.
But the feeling was deceiving. Once we analyzed data together we had a better understanding of the numbers. And the reality was that only 12% of the ad impressions were sold to direct advertisers at lucrative prices. They did deliver on the promise of bringing high-end advertisers and brands, but with a very low fill rate. The remaining ad inventory yielded low programmatic revenue, definitely lower than the potential.
While USA Today did sell campaigns to premium advertisers they were not very good at playing the role of an ad sales outsource partner. Naturally, they kept the best campaigns for their main owned website and audience. And they were not very good at managing programmatic ad sales for others. Probably because of healthy priorities, their own websites came first and other partners were left with crumbles.
Just to be clear, USA Today is a great website and business and I’m certain that their monetization team is among the best in the world. Yet from our partner’s experience, they hadn’t done so well for external websites with which they’d partnered with for monetization.
When we started managing the website’s ad sales process we had to terminate the agreement with USA Today. It was a little scary, stopping a working channel with such a strong name. But looking back, this was a wise choice. Working with Adnimation as an ad sales outsource partner, the publisher enjoyed a 52% increase in ad revenue and we still work together. It’s been over 2 years!
Case Study #2: She Knows and Programmatic Ad Sales Outsource
Another partner we work with these days used to work with She Knows as their ad sales outsource service provider. She Knows is a wonderful website with over 17 million monthly visitors. This audience is very good for attracting big branding campaigns but not big enough to satisfy the brands’ hunger for traffic. Therefore, they started She Knows Media, which helped publishers to sell their ads.
Here again, we saw how direct ad sales yielded blinding high prices, hiding the fact that they accumulated to only a very small part of the total revenue. In addition, the problem with programmatic ad sales was even worse.
All the publisher’s programmatic ad sales were managed under the She Knows accounts, including Google Adx and the header bidding process. She Knows owns a major website which we can assume enjoys high ad revenue results. But what about the partner? We analyzed the actual data and found out that it earned sub-standard ad revenue, probably due to lack of focus or attention.
One month later, working with our team at Adnimation, this publisher was earning 55% more in overall ad revenue. We still offered She Knows to place direct ad campaigns with the publisher, but it didn’t last. Losing that channel hurt a little but it was worth it. The new bottom line was so much higher. And now, with higher programmatic ad revenues, the publisher has more resources and they’ve actually hired an in-house sales manager to work with direct advertisers.
Avoiding Big Names Increases Ad Revenue with Ad Sales Outsource Partners
When publishers hire an ad sales outsource service there are many potential pitfalls. One of those is choosing a famous brand which is known for owning a big website. In many cases, the fact that a company owns a successful website means a conflict of interest. At minimum, it means that the publisher’s interests will be stranded at the bottom of the priority list.
Being legally careful, I want to emphasize again that both USA Today and She Knows could be perfect service providers to most of their partners. In the two case studies shown here, two publishers earned very low ad revenues, probably due to lack of attention. From our experience, this is a very common complaint about ad sales outsource service providers who own a big website. They tend to neglect their partners who can earn much more with other partners.
This post doesn’t cover issues like service level, ad technology advantages, payment terms and others. These issues also help when considering an ad sales outsource partner and I will cover them in the next posts. If you have any questions or concerns about your ad sales, please drop me a line and I’d be happy to share more of my experience.