A company can call itself a publisher, an agency, a network, a broker, a marketplace, an exchange, an optimizer — what does it all mean? What’s the difference between Right Media and Contextweb? Admeld and Rubicon? That’s really the problem — today’s commonly used labels are useless.

Instead of evaluating a company based on labels, evaluate it based on the services it provides, technology it has, the partners it works with, the revenue model and the media revenue it facilitates. Note — below I focus entirely on companies that in some shape or form touch an *impression* — either as a technology provider, buyer or seller. There are peripheral companies that provide a whole world of supporting services, but I’m leaving those out for now to avoid confusion.

Services

Each company provides certain core services to partners, customers and vendors. These primarily center around the relationship the company has with the media that flows through it.

Technologies

There are certain core technologies that define what a company does. Note that you will find technologies such as dynamic creative optimization, behavioral classification and contextualization missing from the below list as they are differentiators — they don’t define what a company does but provide a competitive advantage over the competition.

Size Matters

Last but not least, the size and the partnerships of a company matters. I’ve written before about the perils of building technology in a void. You can have the most amazing platform that provides great services, but if you’re only running a few thousand dollars a month it’s all moot in the grand scheme of things.

Size can be measured either in impressions or revenue, the latter being far more telling. Getting a billion impressions of traffic a day isn’t hard these days — between Facebook and Myspace alone you probably have close to fifteen billion impressions of traffic running daily.

There’s a huge difference between a partnership and a media relationship. If you’re willing to foot the minimum monthly bill, anybody can buy Yahoo’s inventory through the Right Media platform. That doesn’t say much about who you are as a company. A partnership is different — it might be deep API integrations tying two platforms together or co-selling and marketing a joint solution.

What does it all mean?

Phew… that was a long list, so what does it all mean? Well, the above provides a slightly less fuzzy framework than the classical “ad-network”, “marketplace” or “exchange” commonly used labels to describe a company. Let’s look at a few examples:

Rubicon Project provides publisher representation services through it’s network optimization platform, arbitrages inventory through it’s internal sales team has both an internal and has an externally available adserver (one for the sales team and one for publishers) and is rumored to be working on real time buying APIs. That’s a hell of a lot more descriptive than “publisher aggregator” or “network optimizer”. The one thing I always find confusing about rubicon is that it their incentives seem to be fundamentally misaligned. How can you both arbitrage inventory and serve as a publisher representative? Updated (5/3/09 @ 8pm EST) — I seem to be misinformed. Per comments, Rubicon does not sell inventory directly to agencies.

Compare this to AdMeld which provides publisher representation services through it’s network optimization platform — an externally available adserver — and provides buying APIs (currently via passback). So what’s the difference with Rubicon? Well, one has an internal ad-network and the other doesn’t — different incentives. Publishers are starting to treat Rubicon as another ad-network in the daisy chain whereas AdMeld sells all remnant inventory as a trusted partner.

ContextWeb has an internal adserver (with a self-service interface… I don’t count that as external), they arbitrage inventory, and provide buying APIs. Compare this to Right Media which has an externally available adserver, buying and selling APIs, internal trading, data aggregation and arbitrages media (through BlueLithium/Yahoo Network). Both are “exchanges”, but clearly there is a pretty big difference between the two!

Of course if you get to Google your mind starts to explode just a little bit — as they do everything. Seriously. They buy & sell, have multiple adservers, provide buying APIs, internal trading, data aggregation…

Final Thoughts

I hope this post has given you some ways to start thinking about companies in the online ad space. I’d love to hear your feedback in the comments — what core services & technologies am I missing?

Now — next time someone says — “I’m an exchange”, why not ask — “Ok, that’s great, but what do you really do.”

This will make things interesting for my employer Right Media — is this the beginning of the next era of online advertising?

-Mike

Spyware is computer software that collects personal information about users without their informed consent. The term, coined in 1995 but not widely used for another five years, is often used interchangeably with adware and malware (software designed to infiltrate and damage a computer respectively).

Interestingly enough, this dictionary.com entry has a strikingly different definition:

any software that covertly gathers information about a user while he/she navigates the Internet and transmits the information to an individual or company that uses it for marketing or other purposes

Ok, so I”m getting confused as hell. So next I did a Google Search for “spyware cookie” and clicked on the first entry and found this page.

Spyware Cookies are Intrusive
A spyware cookie is any cookie that crosses the line from helpful to intrusive. Spyware cookies are not interested in making your surfing experience better; the sole interest is to gather free marketing data to promote a sale of a product or service. Spyware cookies are placed on your machine by a consortium of websites that track your movement from one website to another.

Spyware cookies can track your every click and record all information you enter into non-encrypted online forms [...]

So I don’t know where the jackass from “anti-spyware-review.toptenreviews.com” got his education in online technology, but a cookie is a text file. I will personally pay someone $100 if they explain to me how a TEXT file can track your every click and record all information you enter into non-encrypted online forms. But really, what IS the proper definition? Well, I don’t like any of the three above, so why not throw in an academic’s perspective while we’re at it — namely here’s a quote from Ben Edelman’s site:

[...]“spyware” software — programs that monitor user activities, and transmit user information to remote servers and/or show targeted advertisements. As distinguished from the design model anticipated by whatis.com’s definition of adware (“any software application in which advertising banners are displayed while the program is running”), these spyware programs run continuously and show advertisements specifically responding to the web sites that users visit. Companies making programs in this latter category include Gator (recently renamed Claria), WhenU, and 180Solutions. Other spyware programs include keystroke recorders, screen capture programs, and numerous additional software systems that surreptitiously monitor and/or transmit users’ activities.

Wow, similar, but yet again, different! Ok, so since everyone and their mother seems to define spyware, I will too! I see a couple key themes: shitty, intrusive, advertising, personal information, communication, uberpowerful. So here goes!

Spyware, an uberpowerful software application that provides rather shitty and intrusive advertising on a desktop computer which communicates your personal information to some shady 14 year old in a basement in Oklahoma.

Spread the word! I won’t be the one to put this on wikipedia, but I dare someone to try! In all seriousness though — if we as an industry can’t get together an actually define what ‘spyware’ is, how can we stop it?

For those of you reading through readers, here are the frame by frame screenshots (gotta read the post for the full flash effect, including the peeing of the pants and the end barf…). In case you’re wondering how these make money, read my Punch the Monkey post.

Frame 1 — Pretty cute kid!

Frame 2 — Uhoh… did he just pee himself?

Frame 3 — … ready?

Frame 4 — ACTION!!

Wondering why people run these ads? Exactly for this reason — it’s too difficult NOT to tickle him, and then hopefully on the landing page you’ll give up some personal information and maybe even go for a free iPod.

I’ve spent a lot of time tracking down this scam and I think it’s time to share that knowledge. Shortly I will post all my knowledge of this scam — what to look out for and how I think as an industry we can stop it. Stay tuned.

-Mike

Ok, so what’s the deal here? There’s clearly no website here, all I see are ads that are related to the New York Times. Well, what you’ve accidentally stumbled upon is a page managed by the new and highly lucrative Domainer industry. Domainers are companies that acquire massive numbers of domains, create pages filled with ads, and then rake in the cash. According to this CNN article the domain ‘Candy.com’ rakes in almost $300 per day in advertising revenue. In a year that means by simply placing ads on this page, someone can make almost $110,000! Crazy right?

Now here’s the best part. When I went to newyorktime.net, the second ad on the page was for the real New York Times. Check out the URLs we hit when we click:

So first off, notice that the ad is being run through Google. Ok, so Google likes the Domainer space. Next we hit ‘ad.doubleclick.net’, Doubleclick’s adserver. This implies that the advertiser paying for this click I just performed is using their own adserver. Next, we go to ‘homedelivery.nytimes.com’ and I see an offer page for getting the real New York Times delivered to my house. The really interesting piece here is that chances are that the New York Times is paying for this click as part of their Home Delivery ad campaign. Chances are that the majority of visitors to ‘newyorktime.com’ actually meant to go to the ‘newyorktimes.com’, and the actual New York Times is now paying to redirect users to where they intended to go.

Considering you can buy a domain for $8.95, that’s not a bad deal right? So, is this a scam or a valid business model? Lets look at it from two different perspectives, the advertisers paying for the ads and the people looking to buy domains.

The Advertiser: So you might say, “Why does the New York Times have to pay to send users that mistyped a domain to go to the real site?” You’re right, that kinda sucks, but then again, why didn’t the New York Times buy all potential spellings of their domain? Even so, now consider the case where the New York Times advertises on www.thenews.com, another parked domain. In this case, the user is clearly looking for a news bit didn’t actually mistype the domain. If you owned a news site, wouldn’t you want to bring this user to your property? Exactly! Parked domains provide some of the most targeted and highly relevant users in the world, and advertisers are willing to pay big bucks to show you ads.

The Domain Buyer: Here is where I think more debate comes in. For the average Joe, it is now practically impossible to get any sort of normal .com domain name. All of the good ones have simply been taken. But on the other hand, these Domainers do bring a certain efficiency to the market. It’s hard to argue that the true value of ‘candy.com’ is $8.95 when you can make $300 a day in advertising profit! Creating domain marketplaces creates efficiency. The domain names that people will type in themselves because they are that good will cost in a lot of money whereas ‘mikeonads.com’ was still freely available a month ago =). So, if prices only go up how is this good for the buyer? Well — because key domains become available. If Candy.com were $8.95, some mom & pop shop in Kansas City will buy it for their little kid’s candy stand. The thing is, of the thousands of people who go to Candy.com every day, very few of them will live in Kansas City. On the other hand, a large candy producing corporation wants to help it’s brand with a short domain name and can also better monetize the thousands of visitors that will naturally come to Candy.com every day. So yes, there’s no more ‘free lunch’ when purchasing a domain, but if you get funded for a legitimate business, you no longer have to worry that you’ll have to settle for ‘thebestcandymakerintheworld.com’. Instead, if you think it’s valuable enough purchase a domain like ‘Candy.com’ from it’s owner, or domains like ‘Candycenter.com’ from Domain Marketplace companies like BuyDomains.

The one thing that I would like to see is a centralized marketplace for domains. Currently there are too many methods, just try doing a Google search for ‘Domain Marketplace’.

More posts to come on this topic. There are definitely some questionable topics here — search rankings via fake content, etc. etc. which need to be discussed. But at the core — the true value domainers bring to the internet industry is efficient pricing of domain names. And hey, if you could make a free $100k/yr just because you own Candy.com, wouldn’t you?