Turning off the ad networks (are you mad man?) Taking on Google and Facebook

It’s the same question media companies have been wrestling with since the internet took off … how to convince advertisers to pay up online?

Advertising print revenues have naturally faced greater and greater challenges over the years as market forces changed newspapers from the only platform, to one of three with radio then television, to today’s multiplicity of digital.

There are many facets to the debate on how to make money from online (though looking at it as one revenue stream rather than several is a mistake in my view) but I want to focus on a strategy which has been adopted by thousands of media companies and titles around the world.

That strategy is letting the ad networks such as Google Adsense do the heavy lifting for us.

Spoiler alert: I’m an editor not a commercial director however like all editors these days an appreciation of the numbers is as essential as knowing what tomorrow’s front page will be.

In the face of seeming indifference from advertisers to our online audiences many media companies, be they single titles or huge groups, have traded trying to sell to their individual markets for the easier route of ad networks, such as Google Adsense.

I get the logic, especially for the groups. Lump all the titles’ numbers together and then take that larger total to get a centralised pot of cash from the ad network. It’s a revenue stream but is it as large as it could be, or should be?

There is of course no ‘one size fits all’ strategy, different titles and groups have to work within the markets they face, but one constant is that it’s always the ad networks who come out on top. We know as businesses that the money we get from them is a fraction of what they achieve, plus we know their rates can undercut ours due to huge economies of scale.

So should we just accept the crumbs and be grateful?

I love Google as much as the next person (probably more, I’m a slave to my analytics) but this is what happened when we switched off Google Ads.

More precisely we blocked all local advertisers from appearing on our site after hearing one too many time from a company or agency, ‘why should we pay you when we can pay Google less and still get on your site’.

Here’s why.

So in the beginning of 2014 I took over the title, it had a pretty poor website and in 2013 had notched up 8.7 million pageviews for the year. While I won’t go into specific figures, the money that generated from Google Ads was minimal, you couldn’t employ a paper boy for the cash it made us.

Fast forward past some hard work by a lot of people, plus a big revamp, and by 2014 we’d grown our audience to 20 million for the year, around 122 per cent up. Consequently our revenue from Google Ads also rose 121 per cent for the year. However the ad team, who barely understood digital advertising and who were more used to selling print space, was able to raise more than five times as much by going to the market direct.

Halfway through 2015, as our numbers continued to rise but we still faced that opposition from advertisers, I took the decision to close off Google Ads to the local market. If they wanted to advertise on our site they paid us, not Google.

It has to be said the ad team was nervous, some feared it would ‘upset’ some clients in the market, but we stuck to our guns. And so we closed out 2015 some 50 per cent up year on year, but more than 300 per cent on what we would have made relying solely on Google Ads.

At the end of 2015 rather than saving money by scaling down our advertising team (trying to make more from less) we instead appointed a top-notch Chief Sales Officer with big digital experience to really fire things up.

So 2016? So far after the first six months we are on track for another big increase in digital revenue. If we achieve the target we conservatively predict it will be 400 per cent up on 2015.

Significantly though with our rise in traffic (60 million pageviews expected this year, no we’re not mailonline.com I know but we’re happy) had we stuck with the ad networks our revenue would have grown 674 per cent from 2013 to 2016, instead by going it alone that figure will be more than 10,000 per cent.

Hubris? Maybe but the key is we believed in our figures and we took that belief out into the market. We believed in the value we offered to advertisers and were confident enough to say no to the easy money.

That to me poses the question: Does the advertising industry really not value our audience reach or is it just better at negotiating their end of the deal? And are we guilty of not pushing back, not fighting our corner, of not believing in our own value proposition, of not selling our unique audience reach?

I don’t blame advertising agencies aggressively trying to get the best price for their clients (and thus the biggest commission for themselves) that’s just business. But are we taking the easy way out by accepting those ad network crumbs?

Maybe big group deals make commercial sense, maybe the easy revenue offsets the potential human resource needed to generate bigger sums. But what could individual titles achieve if they had talented digital sales teams pitching to their local markets? Could that shift the needle? And there’s no reason big group deals couldn’t sit happily alongside locally won deals, is there?

Of course, I don’t know what is going on in boardrooms, maybe they’ve done the maths and already ruled it out. I do know I see a number of titles in both the Gulf and back in the UK with similar numbers to my site totally reliant on ad networks. Why is that?

In the same way that I feel the print industry is responsible for damaging the print industry with the constant ‘managed decline’ mantra (can we swap that for maximising potential print revenue?), I personally feel we’re also guilty of not believing in our own digital future. We’ve told ourselves the numbers aren’t rising as fast as we want, or need, and we’re giving ourselves an excuse to come up short.

In sales, and in advertising, there is no middle ground. They close the deal, they land the client, or they die. They have to believe they’ll win or they won’t.

Isn’t it time we the media industry started believing we can win?

 

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