PubMatic has always represented the best interests of the web publisher, whether large or small, by helping them generate the maximum revenue possible from their web properties. Google’s announcement of a free ad server, Google Ad Manager, is interesting but not entirely new for the market. Free ad servers have been around for some time now, including OpenAds and Expo9 from Exponential Interactive (the company behind Tribal Fusion).
PubMatic provides several unique capabilities that free web publishers from the mundane task of revenue optimization while delivering them more revenue:
- Ad Network Optimization – getting the maximum revenue possible for the publisher, by optimizing across multiple ad networks
- Ad Layout Optimization – finding the optimal ad layout (color scheme, location, size) that increases click-through
rates and revenues
- One Management Interface – one set of ad tags and one consolidated dashboard for revenue reporting
- Premium Account Services – the best optimization people to help publishers maximize their revenue
For the same publisher, Google is now providing:
- Basic ad serving capability for direct-sold campaigns (campaign management)
- Ability to integrate Google AdSense into the ad server so it’s the default solution for unsold inventory
The capabilities that Google now provides are similar to other adservers in many ways. These capabilities are complementary to PubMatic, as many publishers who use PubMatic do so in conjunction with their ad server. While an ad server is typically used to manage direct-sell campaigns, PubMatic is used to optimize across all of a publisher’s ad network relationships.
What’s unique about Google’s offering is that it integrates an ad network, Google AdSense, with the ad server, Google Ad Manager. The real question is, is this good for publishers?
Google is known for excellence with respect to infrastructure and reliability, as well attentiveness to developing good user interfaces. To the extent that these are true about Google Ad Manager, publishers will benefit.
However, for any publisher to consider using Google Ad Manager, they have to consider that they are letting the wolf into the henhouse – one of the ad networks that competes vigorously for the publisher’s ad inventory, Google AdSense, now controls the
publishers inventory with full visibility into pricing. This is analogous to Wall Street using its research services to hype its
investment banking clients a few years ago. The benefit to the investment bank is clear, but it’s the end user who is often
left in the lurch.
Let’s take an example. Prior to Google Ad Manager, suppose that:
- The publisher sells 30% of their ad inventory through direct-sell campaigns.
- The publisher works with multiple ad networks to sell the remaining 70% of their ad inventory, including Google AdSense which doesn’t disclose the revenue share with the publisher.
- Because no ad network knows what the other ad networks are paying or the value of the direct sell advertising, they each pay the publisher as much as possible in order to win the publisher’s inventory.
If the publisher starts using Google Ad Manager, now:
- Google can see exactly what price the publisher is selling his or her ad inventory for.
- Instead of paying the publisher as much as possible, Google can now simply pay the publisher 1 cent over what others are paying. Google can keep the rest as profit for themselves.
- This is all the more true given that Google AdSense does not work on a fixed payout percentage (e.g., 60% for the publisher, 40% for the ad network), like most ad networks do.
Google Ad Manager is an obvious candidate for the publisher who’s looking for a free, basic ad server in the place of a more full featured one. However, given that there are relatively cheap paid ad servers out there, on the order of a few cents eCPM, it’s probably worth it to use a paid ad server and eliminate the significant conflict of interest that Google Ad Manager represents. The end result may very well be substantially higher revenues for the publisher.
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