Adblade - Floggers Paradise

Have a flog but struggling finding extra distribution, especially on good converting inventory? Not to worry, Adblade is here for you.

Who is Adblade? If you've seen these ads, you've seen Adblade:

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So, what's the big deal?

1. Volume

Look at their growth as shown by Compete.

 

This isn't some small outfit any more. This is serious scale. Let's put the growth into context.

 

The above shows a three month chart with adblade in orange, aol in blue, yahoo in green. Speaking of context, let's show one of their ads in context.

2. Placements

Take a look at the lower right hand corner of the ad to see where it was running. Think this is they type of ad NYTimes or any large publisher who is currently providing them volume wants to see?

Here is a grab of that ad with an article:

Why Floggers?
As an ad network, you have some issues in front of you for growth, a classic chicken and egg of advertisers, publishers. It's hard to move one up if the other isn't strong. Look at the success of any organic ad network, and you will find one or two keys to their success. Either they have a technology angle and great sales penetration like ContextWeb or they have a traffic hook, which is definitely the case here. They have done two things that are very difficult. They have secured placement on the premium run-of network placements - news sites, isps, and portals. More importantly, they have been given the ability to serve the ad. It's a big distinction. This means that the site owners don't get to see every ad that runs. They just show a piece of code, and if adblade or any other ad network currently afforded this privilege wanted to run something completely inappropriate, they in theory could. It also means they can run ads without those in ad operations taking much notice.

Having solved the traffic issue, Adblade must find the advertisers that will pay for these placements, which are presumably on a CPM basis. One option is to hire a sales force and go through the painful route of fighting for premium budgets or even premium remnant budgets. Ask those who have done it, and virtually none have done it without having lots of venture money to support the hiring. So, instead, why not service those who can convert run of network traffic best, which in this case are the floggers. And, they love it because how many of them (less than two) have the experience to secure these types of media spots.

Curious about their Terms and Conditions? Under Section 8, Representations, subset vii, part d, advertisers guarantee that their ads "are not false, deceptive, misleading, unethical,..." Working well, I see. Perhaps my favorite part though comes from advertiser the sign-up process itself, where they make a new advertiser acknowledge, "I understand that the Adblade ad formats are unique and proprietary, and I agree to not copy the Adblade ad layouts or designs for use anywhere other than the Adblade service."

For those curious, Adblade's founder and serial, successful entrepreneur Ash Nashed, is a medical doctor. I wonder if he has evaluated the products being promoted and tested their claims.

Arb vs. Arb Platform vs. Platform

The standard flogger is an arbitrageur, buying one off media placements for a handful of sites they run. There is limited to know technology, just grit and media savvy. Adblade services arbitragers, and similar to how some networks operate, takes media risk as well. Given their relative youth, unless they have managed the near impossible (revenue share with large publishers ala Google), it is safe to assume that they are arbitraging as well. Yet, as technology aided intermediary, they are a platform play, not a simple arbitrage play. It's much harder to do, much smarter, and the sign of real business intentions.

Criticisms aside, Adblade has built a real business that will transform from flogger paradise to a long-term player in the ad network space. The decision to service floggers is low hanging fruit for both them and for those wanting to nitpick the business. But, it is Dr. Nashed who will be laughing all the way to the bank when someone buys him for a minimum of mid-eight figures were he to sell soon or nine figures later. He is following in the footsteps of Casale Media, where in the future people will only know his business for the post-flog area. Except for me, how many reading know or even care that Casale made their money selling anti-spyware software by running pops on install inventory? With revenues topping $300mm if not $400mm for projected 2009, their publishers and buyers (ad buyers and/or acquirers) would simply overlook any potential past gray area behavior.

Comments

[teemoney]

Jay-

Having used both ad blade and adfusion, I can attest that adfusion is by far the better of the two for quality purposes. What gets me is these types of placements get distribution but direct advertisers dont. While we spoke today about the proliferation of the floggers (and now I know what your definition of that is) I truly believe the blame lies with publishers as this is a way for branded publishers to skirt the internal network debate. The sad thing is that display market has yet to be efficient and until it does become efficient, the next form of flogging will surface.

[Matias Leiva]

Yeah I noticed that adfusion def. has better conversion/quality of traffic.

Thanks jay for this great insight as well.

[Dana Todd]

Great article, Jay. And balanced - you are right on about the business behind starting and running an ad network.

It is tempting to just take the low-hanging money when building an ad network, especially if you're arbitraging. But if you ever want to get out of that situation, and move to being a true partner with publishers, you do need to clean up your act. You will also burn out with consumers pretty shortly, too, and it may drive "blindness" to your units over time. One of the reasons we're sticking to our guns and running only high quality sponsored content in our storyboard advertorial units is that we want to build user trust and interest. Yes, the sales cycles are longer but the ultimate outcome is that I'm proud of our content.

Dana Todd, CMO
Newsforce Network

[Mirna]

is there other ad networks similar to adfusion or adblade?