Howdy gang, welcome to the third edition of Revenews!

A certain ESP provider acquired an ad marketplace this week, and because I’m a current & hip guy, today’s topic will be on ad networks.

Attempts to stay relevant aside, lets dive in! 🚀

1. Should you use ad networks?

2. Interesting podcasts and acquisitions

3. Recommended reading - a newsletter for entrepreneurs

4. Some real low-brow humour

^{Should you use ad networks?}

Let’s start with what is an ad network?

An ad network is a technology platform that mediates the sale of digital ad inventory between publishers and advertisers. Often ad networks are used to fill unsold inventory and generate guaranteed low-effort revenue. They are a broker of sorts, collecting an enormous amount of impressions and selling them to advertisers, usually to the highest bidder. Thanks capitalism.

🥳 So that means that I’ll get paid automatically, with very little effort?

😳 Well, yes, but there are strings, quite a few of them…

📉 Pricing

For newsletters, ad networks can be priced on a CPM or CPC basis. Ad networks by their very nature offer advertisers low cost impressions, which means that the payouts for publishers usually aren’t great. I’ve explored quite a few ad networks, most seem to offer a CPM of $1-$4, and sometimes less then a dollar. That’s easily less than 10% of what can be achieved through direct sales.

Sometimes CPC can be more lucrative, but after exploring various offers myself, I’ve struggled to find networks offering publishers more than around $1.5 per click, which is OK, but still much lower than you what can achieve via direct sales. Not to mention, CPC is a much less predictable and timely way to get paid.

📺 Ad Quality

A lot of the time the advertisers can be super spammy, to put it nicely. That being said, a lot of reputable brands also use ad networks. Even so, the ad itself is programmatically installed, so it’s not going to be unique to your readers, and typically comes in an image format.

So yes, you can get high quality advertisers, but the payouts will be a fraction of what’s possible directly, and the ad is likely to be a generic banner ad, which may affect your… ⬇️

👨‍💻 Reader Experience

Depending on your publication, having generic or spammy ads may create the wrong atmosphere, especially if you’re accepting the lower tier brands. Personally, when I see a banner ad, I automatically have a less positive perspective of the page. It makes me more acutely aware that my attention is being sold to the highest bidder. Is that just me?

I was speaking to the CEO of a large European ad network yesterday, most of their big clients are either:

(a) Very large ‘tabloidy’ email lists, in which readers expect to see these types of ads. Often with 100’s of millions of impressions per month.

(b) Large, but higher quality outlets with unsold inventory, who’re more selective with the advertisers they accept. I assume these publications view ad networks as a form of necessary evil.

🥰 Relationship Building

Of course, if you’re using ad networks there is no scope for building a relationship with the advertisers. Often contracts have clauses preventing direct collaboration, which can be a real bummer if you’ve ran all your favourite brands at a $4 CPM.

You’re much better off being patient, and leaving the door open to more creative (and lucrative) campaigns.

🤝 Ad Marketplaces, Exchanges & Agency’s

Ad marketplaces and exchanges are platforms where publishers and advertisers connect to buy and sell ad space. The key difference is that there is no intermediary, both sides actively communicate with each other, usually via the platform.

There are a handful of agencies that specialise in media sales for newsletters. They typically work on a commission basis, they’ll have relationships with numerous publishers & advertisers and pitch your audience opportunistically for you. The commission can be quite high (up to 40%), but this is a great way to have a trickle of low/no-effort deals put into your lap.

I did say trickle for a reason, because it most likely won’t be a volume you can rely on filling the calendar, but could be a significant portion of your revenew.

I’ve personally worked with Ad Astra and MadRev across multiple newsletters, they’re both great agencies (and people!).

Not paid to say this!

🐝 Beehiiv’s ad network

If you’re not currently renting a studio flat under a rock, you’ve noticed that Beehiiv just acquired Swapstack, and will integrated the platform into their ad network this year. Because my business is 3 weeks old and my old employers used a different ESP, I haven’t used the ad network, but I know plenty of people who have.

The CPC payouts are still less favourable than what is achievable from direct sales. But it does seem like they’re setting things up quite nicely. They’ve got quality advertisers onboard and creating a fairly aesthetically pleasing integration.

Similar to agencies, I don’t think it should, or could, ever be your primary revenue source. But it definitely seems like it could be a great supplemental revenue stream!

Again, not paid to say this.

👏 Conclusion

There is a balance to be struck between generating easy (but suboptimal) revenue, and sacrificing the reader relationship. Some can offer quality brands and OK looking ads, but from my experience the toss-up has never been worth it. Here’s an interesting article on balancing digital ads and user experience.

If you have a huge newsletter list, and don’t mind sacrificing the reader relationship, then ad networks offer great guaranteed ROI. But I think for most people reading this, it may not be appropriate.

This doesn’t include Beehiiv’s soon to be improved ad network. But, even if it does become a wonderful marketplace for easily acquired quality ad-deals, it’s never going to be enough for a publisher to 100% rely on. It can however, be part of your revenue-producing pie. 🥧

Recommended Reading 📖

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Remote Revenues is the ultimate weekly newsletter for digital nomads and remote workers who want to learn how to buy their first niche website or SaaS business. Shlomo shares his expertise on identifying hidden gems, avoiding pitfalls, and maximising your returns. With practical advice and insights, Remote Revenues helps you create a source of income that can support your digital nomad lifestyle.

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Newsletter News

🤝 Swapstack was acquired by Beehiiv. Swapstack’s platform will be absorbed by Beehiiv this year.

🤯 Media tycoons launch a new brand, and sing praises to newsletters.

👂 Interesting podcast episode with Matt Mcgarry on the secrets behind explosive newsletter growth.

📊 An interesting article on the disconnect between sales & marketing content, and how to fix it.

🤑 Listen to how Blockworks created a $20m/year media business.

🤭 Inbox Banter

I Keep Getting Emails About ‘Male Enhancement’

They go straight to my Junk.

If you enjoyed reading this, please share it with a friend who’d also love it.

Thanks!

Dan.