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Posts Tagged ‘ad network’

Ah, Ad Networks!

Glam gives us this juicy insight into what’s happening over in ad network world. It’s not going to be a fun 2009.

Despite the slower economy, Q4 was the strongest quarter we have had—we will end the year in a triple digit ad revenue growth rate year over year, and also very strong sequentially. We believe Glam is one of the few digital companies with this level of growth in revenue today. The reason is the focus on making our customers-—the agencies and brands successful online, being the number one for women, the scale of reach, premium inventory, targeting technology, custom solutions and our strong publisher network.

Unfortunately, despite their claim for best quarter ever, it’s not really that impressive.  Most online advertising in their categories went up due to holidays and more spend online each year.  It’s not Glam specific.  I see enough detailed data in this industry to know that Glam isn’t crushing it more than anyone else.

The reality is the ad networks and brand advertising online are in for a massive new year’s hang over.  The spends are spent.  The registers ring for a few more days. Then we’ll start to see what we really have.

Glam and other ad networks will lose business because publishers will slowly  get better with online sales and delivery (because they have to!) while the ad market softens in q1.  Glam’s eCPMs will be locked in a market rates because it’s buys and sells are massive and not really all that specialized.  Worse most (not all) of its network sites are bottom of the barrel publishers that will themselves struggle or go under.  In fact, 80% of them are complete SEO spam or worthless blogs and Google’s SearchWiki and other efforts are burying these sites.

(Note: You can tell when a networks traffic is mostly garbage when it hides the Site Affinities on Quantcast – those are the sites users visit in addition to the one publisher.  If you want to hide them, it usually means you are buying traffic or have lots of trashy SEO.)

Glam will not go away, but its not going to recover its valuation ever.  It has already built its business and it won’t be able to overhaul itself to whatever comes next.  Brand advertising online requires big brands and Glam won’t be able to hold on.  The race to win the advertisers is getting very tough now that the old publishers are racing as fast as possible to compete in social media and direct ad sales.

Lastly, Ad Sales is a talent driven business.  It’s about who your ad sales people know.  The technology, the publisher network, and the name isn’t really a differentiator.  So as the salaries and commissions come way down, the sales folks will bolt and take their network with them.  I’ve seen this happen at least 10 times in my direct experience and there are countless examples with Y! and others playing out right now.  Killer sales people keep the brand ad game in business and Glam doesn’t appear to be the place to earn the big bucks.  If you want proof, dig into the heads of sales and the top performing businesses, you’ll see revenue directly correlates.  It’s true in TV, Radio, Magazines and Online.

Maybe I’m wrong and Glam can buck the massive trend in brand ads taking a dive online (both in eCPM and overall buys…).  I doubt it and I won’t be buying my traffic from Glam any time soon.

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