Advertisers Avoid Ad-Blog Networks & Use Google Instead

Apparently, advertisers are avoiding advertising blog networks and using Google to advertise on leading blogs. We noticed a number of brands were appearing on PSFK’s site that hadn’t been bought through our rep, Federated Media - and when we looked into it, we found that the advertisers had booked Google AdSense ads that run in rotation in the unsold inventory. What the advertisers are doing are buying site specific Google ads: in other words, they say ‘run this ad on this site’ to Google.

Why would they do this? We looked at the mathematics and analyzed our stats.

So far in January, 35,000 site specific Google ads have run on the PSFK sites to the costs (and our revenue) of $10.93. That figure is generated by click-throughs, but if you work out the cost to buy a thousand eyeballs (CPM), that equates to about 30 cents CPM.

Federated Media sell PSFK ad space for $20 CPM ($13 when discounted). Federated Media have sold no ads for PSFK in January. Google has apparently.

I mean, we could bitch at current Google advertiser Mr Youth that on one hand they spend so much time for free going through our archives to present stuff to their clients (we watch the stats, fellas), and at another time they’re not giving any love back to PSFK by choosing Google over FedMed*. But, I suppose in the end we feel they’re just cheeky buggers and getting the best bang for the buck (gives us more of a reason to close our archives though).

We asked FedMed to comment. Chas Edwards of FedMed told us:

Google is convinced that humans don’t add value to the ad-sales process (see Eric Schmidt’s quote on the matter, http://chasnote.com/?p=198). Google continues to want to get into the brand-advertising game, but they have been slow to put human salespeople against the project (here http://chasnote.com/?p=184 and http://chasnote.com/?p=240).

In my humble opinion (though I back it with $13-20 CPMs!), brand marketers need scale (Google gives them that) PLUS assurances that their brand will land in quality, relevant environments (Google & the ad networks like Tribal Fusion, etc, try to use robots & algorithms, often with funny or awkward results)….

Because Google & the ad networks can’t convincingly argue that they deliver on quality, relevance & safety, marketers give them direct-response budgets, not brand budgets. With DR budgets, there’s only one metric: The cost per click / action. As you see, the “Google math” tops out at about $0.30 eCPM on your site, whereas brand advertisers are already paying $13-20 CPMs — and we’ve just gotten started. ;)

Gawker Media’s Nick Denton told us, “We haven’t really experienced any cannibalization. But then we don’t run Google on front pages.”

So, if you’re an advertiser it might be a great time to rape and pillage as many bloggers as possible, and if you’re a blogger it might be a great time to manage your ad-sales network more effectively.

* N.B. MrYouth has previosuly approached PSFK/Federated Media about advertising

Update: FM just sold an ad for us from RackSpace!