Running an Ad Network
I expect to see more of this type of news in the coming year. Chitika, a shopping based ad network that shows affiliate deals on blogs, is buying up some of the blogs in its network.
You’ve heard me crap on about the business model of ad networks enough but here it is again: over time all the value goes to the person who owns the consumer relationship. Getting the consumer to turn up to a web site in a valuable context accounts for the lion’s share (80+%) of the value. Sure there are scale issues. Sure publisher’s don’t grow as quickly as stitched together ad networks can but they create the longer term value.
One interesting company to watch in this space is Blue Lithium.
[…] If it’s not advertiser relationships, what should publishers focus on? First and foremost every publisher should focus on increasing the user-experience on his properties, attracing more and higher quality users and collecting more information about said users. I think Niki Scevak has it right in this post — Running an Ad Network — where Niki argues “You’ve heard me crap on about the business model of ad networks enough but here it is again: over time all the value goes to the person who owns the consumer relationship.“. It’ kind of like that movie Field of Dreams, “If you build it, he will come”. Not that you don’t have still have to work to bring in the advertiser dollars, but quality users make selling a lot easier. […]