Ask HN: Who knows about Ad Networks?
I'm a young entrepreneur who just launched a start up. In my niche I see an opportunity for an Ad Network, but I don't really know much about how to set one up. Could anyone mentor me on this?
There is very little room for new player in this space, and the players who have reached scale are very well funded.
Ad Networks will be a 'winner take most' market, and I do not suggest trying to play in it unless you have:
a) deep pockets b) some amazing technology that is really innovative and groundbreaking c) a disruptive business model d) massive domain knowledge (which you just said you don't have).
This is not the best beach to surf IMO. Any niche you've found that reaches any kind of scale will be taken by the bigger players who have hundreds of sales executives each.
The opportunity for bootstrapped ad networks is long over.
One key you need to understand about the display biz now -- advertisers aren't as focused on buying sites anymore. Instead, they think of it as buying "audiences." Buying from a couple exchanges will give an advertiser reach to 95+% of the web. Add in some unique data with the built in targeting of the exchanges, and you can make both very broad and very very granular buys.
There are actually players in your "niche", you just can't see them because they are way too big. The large buying platforms are capable of targeting users (audiences) on a very granular level.
The only real model that works now is:
A) create unique tech (dynamic creatives a la Like.com) or gather a unique data set (preferably do both)
B) charge a premium for use of your unique tech / data while buying on the exchange
With any other approach you either won't make much money (so big players not interested) or won't find clients / leverage (big players too ingrained already and will crush you).
In addition to setting up your own private label network, you can buy and sell inventory on their exchange. This lets you appear bigger than you are. For example, if you are able to sign up a publisher in your niche, you can immediately start trafficking relevant ads to show him you're capable. You'll make more money attracting Advertisers in your niche to buy those impressions, but that's a chicken/egg problem that being part of an exchange helps with.
Keep in mind that the entire display ecosystem is already on / moving towards an exchange-based model (rather than a network based model). Most networks now buy a lot of their inventory directly from the exchange.
So if you're looking to start your own network, you should be thinking about building it on top of the exchanges, and you should also have some unique offering: expertise in display / optimization, unique data set, etc.
It sounds like the poster has a niche market he (or she) understands. In that situation, I don't think technology needs to be a selling point.
The hosted version (called OnRamp) would be the place to start - it's free, performs better (it's not all PHP), and gives you easy market integration (which the original comment was referring to). OpenX may or may not be what you're looking for, but at least you can test the waters without any initial investment other than creating an account and setting up a few tags.
(Disclaimer: I work for OpenX.)
It took me 2 years to understand the sales process and to make the right connections at brands and agencies to make it work. YMMV.
1. Setting up a network outside of Google Ads is all about traffic. Most of the networks have minimum traffic quotas and won't really talk to you until you satisfy their requirements.
2. Most use Google's DFP (DoubleClick For Publishers) to serve/price ads.
3. Be aware that the lower quality ad networks are susceptible to malware intrusion which sometimes run through their ads and you will have no control over when they infect your users.
2. Many use DFP, but many also use Microsoft ATLAS, Open X (an open source ad server), among others.
3. Definitely true. Shouldn't be a problem as long as you stick to the more well known names in the space. Another concern with lower quality networks is click-fraud.
Google Adwords seems overly competitive for certain keywords and seems to result in overpaying for traffic. As an alternative, Microsoft AdCenter has been effective - but I was wondering if anyone else has had experience on other networks?