Ad networks don’t make publishers real money, they make ad networks money. I have worked with every single ad network in the universe and ultimately, ESPN’s decision to not work with ad networks is in fact pretty wise. First off, in my days as VP of Ad Sales, I pleaded with my penny-pinching President to yank all ad networks… he loved those extra few dollars they brought… even though they only generated 10% of our revenue despite having 50-75% of our ad inventory.
For that reason, ESPN’s decision to yank the ad networks is tactical but the fact ESP’s parent Disney is trying to get other publishers to scale back their use of ad networks boils down to the fact that as ad networks build their reach across audiences and high-quality web sites, then there is a risk that advertisers eventually bypass many of the publishers and work directly with ad networks. This won’t happen: marketers will continue to go directly to portals, large social networks and top tier publishers… but ESPN’s worry is not hollow, either.
Net-net: smart move by ESPN. They probably generate 80-95% of their revenue from direct deals and ad networks don’t really add much revenue, and with the leftover, unsold inventory, they can promote other Disney products and services or partnerships.
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