Another Ad Network Gets Busted

This time it's TMP (TrafficMarketPlace), as a user alleges that Travelocity and Cingular are still serving ads through malware. As I mentioned in this post, that's how it happens to major advertisers, and surely they know by now that it happens this way.

I pulled my company's advertising out of TMP because we suspected some funny business from one of their affiliates. We experienced a sudden spike in impressions, no increase in clicks, CPAs going from about $5 to hundreds of dollars in a single day. We suspected impressions fraud. We went round and round with TMP to try to get a resolution in place, then all of a sudden, my rep left, her spot was not backfilled, and the VP of Sales became suddenly unavailable. We ended up simply not paying for it, and ultimately not working with them anymore.

And now this.

Walled Garden Down, Ad Revenue Up

AOL has profited handsomely by moving from a subscription-based revenue model to an ad-based revenue model, and the proof is in this Mediapost article (free subscription required).

I don't think anyone is too surprised that this might occur, but the article might lead one to believe that all the growth comes from AOL.com, specifically. I was questioning that, and the article is silent on it, leading me to wonder: how much of this revenue growth comes from network cash cow Advertising.com?

One amusing part of the article is toward the top where they say:

"The Time Warner unit's decision last year to replace its ailing subscription model with a free service supported by advertising resulted in a 454% surge in billings from 2005 to 2006, compared to a 142% increase in portals overall."

Gee, this makes 142% sound so paltry. But seriously, it is good to be a portal, as Jeff Lanctot at Avenue A confirms in this ClickZ article.

Are Ad Networks Safe for Brands?

Of course they are, according to this iMediaConnection article in which the author interviews Joseph Apprendi. And who is Joseph Apprendi? He's the CEO of Collective Media, a "leading online advertising network specializing in audience targeting and optimization". And if you can't trust the CEO of an ad network, who can you trust?

To be fair, Apprendi does recognize the need of brand marketers for transparency, which is the number one point of contention between ad networks and advertisers. But he does suggest that the desires for 100% campaign (not just list) transparency and complete control over carve-outs are unreasonable, and does slightly mischaracterize the issue as one only of quality assurance. That's part of the issue, to be sure, but the one issue he would never bring up is that of bait-and-switch. We've seen this before -- ad network touts ESPN and CNN and iVillage as part of their networks, and you run with them, and within a week you're getting emails from your CEO with links to www.popcap.com, wondering what the hell the media buyer is doing advertising a product clearly intended for adults on a site for little children. (Of course, you could reply asking your CEO what he's doing on such a site himself, but you wouldn't have to love your job too much to do that.)

Ad networks want nothing to do with the bait-and-switch discussion because for some of them, it's a core business strategy, and the others who might be sympathetic to a client's wishes don't want to pigeonhole themselves into a guarantee that's too hard to keep. Until the networks can figure out a way to give brand advertisers what they need (not just want), they're never going to become a must-have part of the plan.

A Downside of Blind Networks

Looks like AnnCoulter.com is starting to appear on advertiser hit lists, even as they get top-flight advertisers, thanks to their relationships with ad networks. Their being hitlisted may not be because of her politics per se, but because of that age-old #1 enemy of advertisers: controversy.

This post in Daily Kos reveals the names and contact information of various advertisers who've appeared on Coulter's site. The mission of the poster is to"out" advertisers who support what they term as "hate speech".

We in marketing know that this kind of thing -- running on controversial, divisive, or otherwise wacky and irrelevant sites -- is de riguer when casting your lot with a blind network. It's bad enough when this kind of thing happens when you have a CPA buy running -- but to trust any blind network with a CPM buy with zero transparency, and I don't care how "reputable" the network is, is something like dumping your money into the middle of the street and setting on fire the portion of it that's not blown away by the wind.

On the one hand, serves them right. It's 2007, and if you don't know that this kind of thing can happen on a blind network by now, you're either ignorant, cynical, in cahoots with blind network sale people, or stupid. Any agency that allows this to happen should be put on the hot seat by their clients, pronto.

On the other hand, this is one more data point in the discussion of transparency in ad network buys to start with. If this can move the discussion toward a resolution that provides a broad level of insight into where your ads run on ad networks, then it's totally worth it for some advertisers to die from the poison berries on your behalf.

How Major Advertisers Get Sucked Into Adware

FTC Fines Adware Company $1.5 Million

No major advertiser who values its brand wants to associate it with dark-gray-hat adware companies. Certainly Travelocity, Cingular and Priceline didn't want to. So how does it happen?

One common way it happens is through affiliate marketing. When an advertiser wants to spend a lot of money to acquire a lot of customers under very tight CPA goals, they tend to spread their dollars around to more sources, and the deeper into sources they get, the less diligent they are vetting the sources. When an advertiser signs a CPA media deal with ad networks, even big-name networks owned by major media companies, they are charging the network with the responsibility to drive high volume within that cost goal, and historically they do not ask very pointed questions about the networks' tactics or affiliates. It's a sort of "don't ask/don't tell" tactic that they hope doesn't blow up on them.

Some affiliates of brand-name networks might be networks themselves with their own set of affiliates, and some of those affiliates might be affiliate networks, too. So sometimes, by the time your advertising actually appears on a site or in a desktop app or bundled with a software download, it might be several times removed from the original deal the that you the advertiser did with the big-name ad network. Unless you have the right kind of tracking software -- and not many low- or mid-budget CPA advertisers do -- you have little idea where your ad actually ends up.

Exacerbating this is the common tactic of networks to cloak their affiliates from the client, ostensibly to keep the advertiser from doing business directly with the affiliate and thus cutting out the ad network middleman. But another unacknowledged reason is that if you as an advertiser knew who some of the affiliates really were, you might well demand your money back. I have before -- I recently had some $170,000 in CPA advertising credited by one network when I discovered a certain affiliate that was carrying my advertising in a manner that blatantly and brazenly violated the insertion order terms and conditions.

This incident should probably wake up large customer acquisition-oriented advertisers to vet their ad sources more carefully, at least in the short-term. What they should try to do is insist that their ad network vendors be fully transparent and report where their CPA advertising runs, or else either take their business elsewhere or build their own affiliate networks.