The backlash against remnant ad networks appears to be gaining, as Time Inc. is considering whether to move towards the model offered by premium vertical nets like fashion-focused Glam Media, Mediaweek reports. The piece also profiles Rodale’s migration away from reliance on using third party ad nets to handle unsold inventory to focus on premium placement and verticals. Rodale says its network of health and lifestyle mag sites now have ads that mirror their content, as opposed to the usual horror stories associated with remnant ad nets, such as the time an ad for one carmaker appeared on a site where Rodale had more expensive direct ad sales for a rival auto marketer. More after the jump.
— Saying no to remnant’s special sauce: Last week, I spoke to Jim Spanfeller, president and CEO of Forbes.com, which has become something of a model for other mag publishers looking to navigate the remnant vs. vertical ad net divide. Forbes.com formed its 400-plus member Business and Financial Blog Network last spring. Spanfeller described the remnant business as “boiling everything down is arbitrage. They buy low and sell higher, presumably, after adding some secret technology special sauce. Since there are tons of these companies right now and they are all offering pretty much the same value proposition, the only real lever that they have to compete on is cost. And here the cost is totally defined in [direct response] metrics; cost-per-click, cost-per-action, cost-per-application and so on.”
So what’s the problem with those formats? Spanfeller: “Basic free market theory suggests that this will be a run to the bottom. Each turn of the wheel will net lower and lower gross costs to the network and net costs to the publisher. What is more, this model totally focuses the agency — and eventually the client — on DR metrics with no attention paid to the brand. Given some of the placements that these networks produce, campaigns that run through them can often actually devalue the marketer brand. But since the focus in not on that end of the paradigm, no one is paying attention to it.”