Subverting Advertising Networks
Several “innovative” advertising networks have sprung up recently, and bloggers can now make money by offering text links or writing reviews. These networks typically take half of the commission that the advertiser is willing to pay.
The question you should be asking yourself is, “do these advertising networks provide enough value to justify taking half of my revenue?” If you were to ask me (and I realize that nobody did), I would have to say they do not.
Not even close.
The only real benefit these networks provide is a marketplace that makes it easy for advertisers and publishers to connect. Well, if the world’s biggest marketplace can only get away with charging 5.25%, what makes these advertising networks valuable enough to charge 10x that?
Fortunately for us, it’s extremely easy to go around these networks and avoid paying them anything. Most of these sites let you view their inventory simply by visiting their homepage or you may have to sign up for a free account. Now all you have to do is find a site you want to advertise on and arrange the advertisement directly with the publisher for 60-80% of the original asking price.
What do you lose?
Well, for text links the advertiser and publisher don’t have an unbiased third-party that verifies the advertiser has paid and the publisher keeps the link up. This may pose a few problems, but they are easily solved. The publisher has to keep track of each link’s expiration date, and the advertiser needs to check on their link every once in a while (preferably automated, and definitely through different proxies).
Is this a hassle? Sure.
Is the hassle worth increasing your revenue or decreasing your ad spend 20-40%? You bet.
The case for working around the review sites is even more compelling. What do you lose if you bypass the review site? Well, the publisher no longer has to disclose that it’s a paid review (although they probably still should). Also, you don’t have the assurance that the post will remain up for 30 days, but if you think the publisher is going to pull your post before 30 days are over it’s probably not someone you want to do business with!
Do I take credit for this idea? No, this has undoubtedly been going on since the day these networks launched, but nobody is talking about it because most “A-list” bloggers are in bed with at least one of these networks.
Do I have something against these companies? No, but I do think it’s about time someone called them out on their price gouging. It might as well be me.
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I completely agree that TLA and ReviewMe are taking a significantly bigger chunk than they need to take, and I don’t quite understand why everyone just allows that to happen. I have personally avoided using ReviewMe because of this.
Hi Alex,
Just saw this post and had to respond.
You ask “Why everyone allows this to happen”…. Well, they don’t
We charge a 35% transaction fee over at SponsoredReviews. We agree 50% is too much.
For those of you that would argue that it can be done for less then 35%, I’d like to see you try, and not go broke doing it. Ebay, with it’s millions of transactions, is a poor comparison, as it is dealing with massive economies of scale.
For those that do have the time to approach publishers directly to negotiate special rates, more power to you.
Great point that I have been running over in my head lately. It seems like the paid review model works great for the Advertising Networks, who really don’t do much.
You could charge half the price on your own and get the same payoff and the people paying would think you were giving them a deal.