I Don't Understand Web Advertising

By Don Lange

Direct Marketing News

October 2004 — I don't really get the way web advertising is being sold. In fact, I think it's a bit dubious.

Whenever you contact one of those media companies that specialize in this business you get referred to the "network" of sites that are under its management.

Now, this sounds like it's a major convenience for the agency and probably a major convenience for the web site owner. But doesn't this also sound like a conflict of interest?

I can just hear the tut tutting of dotcom ad types who want to pat me on the head and say, "there, there, you just don't understand."

Maybe I don't. But when direct mailers call list brokers for a recommendation the process is fairly straightforward (although never easy to execute). Brokers start by assessing the target market of the mailer. They then research all of the available lists and see if the demographics and make-up of the list presents a suitable target for the mailer. Brokers don't really care who manages the lists – above and beyond their need for expedient and efficient service.

Most list companies have both a brokerage and a management division. If a broker predominantly recommended lists that their sister companies manage then there would be a big outcry. And lets face it; in the direct response business the only thing that matters is response. Brokerage companies wouldn't last long if they tried to pull a stunt like that.

And yet, in the web advertising business it seems to be the norm. No matter what your offer, the recommendation seems to steer you towards a group of websites that get lumped into categories usually called "networks". Probably called that because it sounds more technical.

I guess for the owners of these websites there are some payoffs. If you're part of a network then you're constantly being pushed on advertisers. Of course at the same time, most members of these networks sell web advertising independently so I guess there is still a lot of space available.

For Advertisers

If you're an advertiser the issue of getting a complete and well-thought out recommendation seems a bit questionable if you're always receiving the same proposal.

I have heard of the arguments of why advertising through a network is more efficient. Among them are reporting and economies.

Okay. I'll bite. The reporting does seem pretty cool when all of your advertising is being served through the same system. However the minute a web site serves its own advertising then you have a disconnect in the continuity of information.

Economy. Maybe. However I doubt it. Whenever we have purchased advertising directly from a source we have been able to negotiate much better pricing.

Maybe I'm being ornery about the whole thing because Cornerstone doesn't represent a network of websites. When you ask for a recommendation for online advertising from Cornerstone you receive a well-thought out recommendation that looks at all available web sites that might meet your target market.

That is certainly not very dotcomesque. I wonder why these clients keep coming back?


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