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Where to Buy Traffic - Direct Buy VS Adnetworks

Discussion in 'Media Buying' started by mobidea team, Apr 11, 2016.

  1. mobidea team

    mobidea team Junior Member Premium Member

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    You have probably already read stories about people who buy traffic on the internet. However, you feel like you don?t know how to start doing what they do. When it?s time for a Media Buyer to actually buy traffic, he/she can either buy the space on websites directly from a website owner (the publisher) or from an adnetwork that is the bridge between the publisher and the Media Buyer. As always, there are both advantages and disadvantages that come with picking each of these methods. Let?s explore them today.



    Direct buy

    When you choose to buy traffic directly, you?re basically buying your impressions in bulk. The first step of this process is to contact the owner of the website in which you want your ads to be displayed. This is already a disadvantage, since you have to spend time searching for websites that interest you and you also need to contact the person/s or company associated with the website. After contacting the owner, it?s time to start negotiating the price. Naturally, the website owner will want to have as much profit as possible. That means the first proposed price will probably be too high for you to have profit ? and it is now that you have to make use of your bargaining skills!

    Some Media Buyers believe that the best approach is to ask the website owner to run a test on the remnant traffic, so you can study the volume of the traffic, the CTR, the conversion rate and calculate the relevant indicators, such as the eCPM. However, you must not forget that, if you perform a test using remnant traffic, the eCPM will be lower than if you take the highest quality traffic. The same happens if, during tests, you do not have all the traffic of that website but only the highest quality traffic. Eventually, when you do get all the traffic, your performance will be lower because you?ll receive a higher quantity of low quality traffic. Remember that when you do direct buy, you buy all the traffic, which means you?ll have both high and low quality mixed together. You have to look at your test results in a critical way before buying the space on the website. If you decide it?s worth buying, you have to negotiate a price based on the results with the publisher.

    Others reckon the best approach is to be straightforward. That means you place the price you?re willing to pay, in case you already have some information about the website?s performance. In the end, you?ll agree on a fixed CPM rate, so you?ll have an inventory that is guaranteed and reserved for you.

    The great advantage is that you cut the middle man (the adnetwork). Hence, you can make good deals at great prices that are much cheaper than the ones adnetworks charge. Another advantage is that you can find websites that relate to the product you?re advertising, so you can target your visitors and improve the quality of your traffic, since you are essentially targeting the ads to a specific website. You?ll also know exactly where your ads are being shown. This method is especially advantageous for advertisers who want specific exposure and have goals. For example, if you have a specific offer (eg. a game) you want it to be advertised on the most relevant websites for that game, since the visitors of those websites are probably interested in the product you?re advertising. Here, you can see an example of a single offer of a game:

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    Furthermore, since you know the website where your banners will be displayed quite well, you can adjust the banners to the website layout in order to be more appealing, therefore making sure you increase the chances of conversions.

    In addition, direct buy is generally characterized by a high level of transparency. Indeed, while the deal is valid, you?re sure to know your position, impressions, expenditures and dates.

    Another important aspect of direct buy is the minimum investment required by most publishers. Despite the unspoken rule that all prices are negotiable, the owners of large websites with attractive inventory will ask for very high prices, which can be a deal breaker for Media Buyers looking for small/medium investments. Nonetheless, the owners of some smaller websites might agree to make a deal at more attractive prices.

    As already stated before, direct buy?s main disadvantage is that you won?t be able to understand the performance in detail before performing tests. Additionally, if the performance of the website changes during the period for which you?ve bought the space, you may lose money since you can?t change the deal. Concluding this part of our analysis, there are a couple of crucial notes that must be added: a) when buying direct or Flat deals, you book the spot for a long period. The problem is simple: if there?s a change on the offer?s performance you have basically nothing to do but remain with the spot and traffic that can no longer convert which means you can expect huge losses; b) booking the whole spot makes the target harder to optimize. On a CPM/CPC campaign created on an adnetwork, you can easily work on you target. You can cut devices, focus on specific OS, target carriers, etc. With Flats and Direct deals, however, you can forget about this.



    Adnetworks

    An adnetwork is the middle man that sells you space on websites. When working with an adnetwork you will be auctioning the space on the websites along several other Media Buyers, meaning that you are in competition with them. With the highest bid, you?ll get the first position and this is how most of them work (though some adnetworks work with AdRates). The first position gives you the first impressions and better quality traffic. Even so, this doesn?t necessarily mean you?ll have the highest profit. Indeed, your profit will depend on how much you?re paying, on the quality of the traffic, and on the offers? performance, so it can happen that a lower position is more profitable to you. The fact that you?re in direct competition with other Media Buyers implies that you?re working in a dynamic and unpredictable marketplace. As a result, the ad inventory is non-guaranteed. Here?s the logic of Media Buy: to find the right balance between what you pay and the performance of the offer you?re promoting.

    Whereas in direct buy you purchase impressions in bulk at a fixed price and data range, when you use adnetworks you know there are no fixed deals of any kind. Furthermore, you have different available pricing models, depending on the adnetwork, and you are bidding either on impressions (CPM ? cost per a thousand impressions), on clicks (CPC ? cost per click) or on views (CPV ? cost per view) which can allow you to better target the prices you?re willing to pay for the traffic. In case you find a gold mine segment where you can easily have the first position and make a lot of money, this can surely be a huge advantage.

    Another very important aspect is that some adnetworks provide a Smart CPM bidding option and hence the price you pay is a percentage higher (for example, 10% on Exoclick) than what the person under you is bidding.


    On the other hand, there are some adnetworks that give you the opportunity to get a flat rate for a specific website (EroAdvertising could serve as an example in a self-service mode) or for remnant traffic, so you?ll have all the traffic for a period of time, which is essentially the same as buying it directly but with a middle man. Adnetworks provide this service inasmuch as this allows them to not only make more money but also make sure that the whole spot is bought. As in the case of direct buy, this can also be profitable for you, if you?re able to negotiate a good price with the adnetwork.

    The great advantage of using adnetworks is that you can easily reach a wide array of websites and thus more audience. With this kind of access to different websites, you can learn which ones aren?t profitable or the ones that do bring you a lot of money ? so much that it makes sense to create premium campaigns for the latter. In addition, many adnetworks have programmatic buying (such as Exoclick and EroAdvertising), which means they use technology which allows you to optimize the media buying process. This means adnetworks have platforms that make it easier to set up campaigns and which give you detailed information on the traffic for each device, browser, carrier, etc. This ultimately allows you to effectively target and optimize your campaigns, letting you cut what is making you lose money and focus on what is turning a profit.

    Even though the majority of adnetworks use this type of platforms, the same does not usually apply when one buys directly. Nevertheless, there are some platforms, such as Shiny Ads, PubMatic or Adslot, which provide such tools ? programmatic direct ? where you can get traffic of a website based on the targeting you have requested.

    Compared to direct buy, the investment you need to make when getting started on an adnetwork is certainly lower. Indeed, even if you invest a low amount of money, you can gather a lot of valuable information.

    In conclusion, both direct buy and adnetworks have their advantages. Direct buy can be a good choice if you wish to advertise on specific websites. However, the process of contacting and negotiating a price with the publisher is time-consuming and the investment is high. As for adnetworks, they?re great if you want to get a huge chunk of information with a relatively low investment. Moreover, adnetworks allow you to optimize your campaigns more efficiently.

    If you?re a beginner, the answer to your problems is clear: start with an adnetwork. That?s the only way for you to gain experience, becoming able to understand how all the parameters and different variables influence both your costs and profits. Afterwards, once you?ve gained the experience you need in order to feel comfortable with the whole media buying process and you?ve found a great opportunity, you can get to another level and definitely give flat rate or direct buy a try.