By passing Adsense and selling ads direct

[NickMNS]

Last week I received an offer from an advertising firm that represents some of the biggest brands in my niche that happen also to be some of my biggest advertisers. They would like to place ad code directly on my pages and are promising (but not guaranteeing) high rpms, based on a cpc arrangement.

I must assume that they can deliver on what they promise, at least to some extent. And it is clear that by removing the middle man we could share the value that was being taken by Adsense. BUT where I struggle to see the benefit is:

- How can showing only contextual ads provide a better outcome than showing an optimized mix of contextual and personalized ads? Not every user that is visting to my website is interested in the niche. Some are just passers by. By showing only niche related ads, I essentially forgo any potential revenue from this subset of users.

- This firm represents, some of the brands in my niche but not all. How does eliminating competition benefit me?

So I do a mix of Adsense and direct ads using DFP:
- But now if this subset of brands is showing ads directly, they are no longer participating in the auction for the Adsense space. As a result, the auction price will fall due to a loss of demand. Moreover, the direct ads will likely be shown in the prime ad-slots, further pushing prices down. Yes, since the direct ads are using up a portion of the inventory, this reduces supply, but since the direct ad short circuit access to supply, the reduced supply likely will not make up for the reduced demand.

Backup ads:
- This seems like great idea at first. Sell them my unused inventory. But assuming a constant demand from this advertiser, if their ads appear normally, I am getting paid the market price. If then their ads start to appear as back-up ads at a discounted price, they can now show fewer ads at the market price. Thus reducing demands and dropping the market price for all advertisers, thus allowing their ads to appear for an even lower discount.

Am I missing something here? How do I benefit, by allowing one of my established advertiser to short circuiting the auction process?

[ember]

I've been approached by direct advertisers and have turned most down (I have one now in just one slot on one page) for the reasons you mention. Adsense has its issues but is so easy and pays well enough. And direct advertisers are a pain to deal with (invoicing, collecting payment, answering questions, explaining traffic numbers, etc.).

[tangor]

For all he extra work involved, I have found that direct advertising pays so much better than adsense there's no comparison.

[NickMNS]

@tangor, how do you implement the direct advertising?

[tangor]

I, seek it, sell it, display it, then bill for it. Technical details are just mechanics and bookkeeping.

[LuckyLiz]

Last week I received an offer from an advertising firm that represents some of the biggest brands in my niche that happen also to be some of my biggest advertisers.

That sounds like an ad network, not individual advertisers buying direct from you.
In my experience most of the ad networks now claim to use header bidding to get the highest possible prices, but I've seen some that just pull from the same ads that Adsense does, so you get a percent of the percent the network gets from Adsense. Your niche may be different, but our experience testing these has been that we make more with Adsense in prime spots than we do with other ad networks.

[NickMNS]

@LuckyLiz in this case it is a company that represents some big websites in my niche (I believe that all the properties represented are owned by one owner). It is not ad network that would be an alternative to Adsense, like for example Media.net.

The concern I have is that this advertisers already advertises extensively on my site through Adsense. It is nice that they promise high rpm's but the question is what happen to my Adsense rpm when this advertisers pulls out to go direct? Will I see a net improvement in earnings? I cannot see how letting one player bypass the auction will benefit me in the long run.

[IanCP]

Back in 2003 I introduced a good friend of mine to AdSense [same genre as mine]. It performed so well for him he was able to finance his daughter's university education in the UK. She did IT etc.etc at Uni.

He himself was a college lecturer, with gazillions of lecture pages, notes as content for his site, as well as being a noted author of over 100 books in our genre. A lifetime collection - a source of very rich content material.

His daughter revamped his site, and it reached the stage where he gave away AdSense entirely years ago, and hired his own advertising agent, who for his 30% commission, takes care of everything for him. The whole family now own the business.

The direct advertisers are all the big names in the genre. My friend estimates it would have at least cost him the 30% commission to employ other people to keep track of advertising, payments and the 101 other daily issues.

[Edit] Typo's

[keyplyr]

Last week I received an offer from an advertising firm that represents some of the biggest brands in my niche... it is clear that by removing the middle man we could share the value that was being taken by Adsense.

An advertising firm IS the middle man.