2016 Focus on Europe: Ad Networks

Stephen Yagielowicz

If there’s one thing that every internet-based business needs, it’s traffic — that flow of visitors that drives ecommerce, education, social interaction and more.

Today, that traffic comes from a range of reliable sources, from search engines to social media sites, old-school adult sites, to next-generation ad networks that provide prospects to advertisers and predictable profits for publishers, which has placed these latter services at the forefront of web economics.

I think this is a very exciting time for the ad networks and the most innovative networks will win.” -Thomas Skavhellen, PlugRush

XBIZ recently asked a leading group of ad networks about the current state of adult traffic acquisition and monetization, with a focus on the European market in 2016. Here’s what they had to say.

According to Thomas Skavhellen, PlugRush chief brand officer, from an adult ad network’s point of view, the current state of the market is very much the same as it has been for the past couple of years.

“It’s still mobile redirects and mobile pops, together with some desktop pops that run the networks,” Skavhellen says. “Banners are still alive, but we see more and more networks going over to native ad verticals, [which is] something PlugRush has had since the very beginning; and we see the mainstream networks are pushing out to the news and blog world.”

Skavhellen says that both on the ad networks side and on the CPA/CPL network side, PlugRush sees a big move over to mainstream markets.

“This does not mean that adult traffic is going anywhere or is any less valuable, it’s just a filler since we still see that adult offers convert much better than the mainstream ones,” Skavhellen notes. “PlugRush is also experimenting with mainstream traffic now, and will be ready to take on [mainstream] partners at the September shows.”

ExoClick’s head of advertising, Oliwia Kaluzynska, notes that as well as language and cultural differences within each individual country, it is important to consider the geographical location of country blocks.

“Western Europe is the most affluent, while Northern Europe is affluent, but more sparsely populated,” Kaluzynska says. “Eastern and Southern Europe have lower standards of living, so your average revenue per user will also be lower, therefore you need to adjust your pricing model in order to maintain the lifetime of users.”

Kaluzynska also notes that wealth within these zones affects the type of mobile traffic available.

“The iPhone is stronger in the north and west especially in Switzerland, Holland, Austria and the U.K., as opposed to Southern and Eastern Europe where Android devices dominate,” Kaluzynska reports, adding “There are lots of monetization opportunities on a local level so advertisers should investigate and know the carrier restrictions, billing options, and what types of offers are going to work best for conversions in each country.”

Another factor impacting ad networks today is security, and the transparency it requires.

“The ad networks are fighting everyday against fraud traffic on one side and shady publishers with auto downloads and malware campaigns on the other side,” Skavhellen explains. “Having a system to win this battle on both sides is key here.”

One thing to consider in this analysis are the differences between European advertisers and publishers compared to those in other markets, but these variances may not be as distinct as one might imagine, due to the already homogenous global nature of the internet.

Skavhellen says that PlugRush serves advertisers and publishers from more than 70 different countries across all continents, and does not believe there is a big difference in how their clients seek out services.

“PlugRush serves small and medium-sized publishers and advertisers through its self-serve platform,” says Skavhellen. “Our platform is also translated into seven languages to make it as easy as possible for everyone to buy and sell their traffic in their own language.”

Richard Cottrell, ExoClick’s global sales director, notes that Europe is a highly fragmented market so it is key for ad networks to have in-depth local knowledge of each different European country.

“At ExoClick we have dedicated account managers who are both native speakers and specialists in their home countries,” Cottrell explains. “Our account managers are the gateways for advertisers to reach those specific markets, and can help [advertisers] align their offers to local tastes and behaviors as well as pricing models.”

On the publisher side, Cottrell says that having localized payment options are especially important when one notes that out of 51 countries that are considered to be in Europe, only 19 use the Euro as currency.

“Local currency payments are of prime importance,” Cottrell confides. “For example, the majority of Russian publishers prefer to use WebMoney for transactions.”

As for what the future holds for adult ad networks and the European scene, Cottrell predicts that it will continue to be a highly competitive market, where ad networks must ensure that they provide quality traffic sources to advertisers, and help publisher sites maximize their revenue opportunities — including helping clients overcome the increasing use of ad-blocking tools.

“Ad blocking is growing in Europe,” Cottrell reports. “In May of this year, the IAB released its U.K. Ad Blocking Report, which revealed that 22 percent of British adults online are currently using ad blocking software, which is up from 18 percent in October of 2015, so ad networks need to provide publishers with solutions to monetize their ad-blocked traffic.”

“ExoClick’s solution is NeverBlock, which is proving to be highly effective,” Cottrell concludes, adding that offers a case study from one of ExoClick’s top publishers showing how the system increased its revenues in various European countries.

For his part, PlugRush’s Skavhellen sees a trend where a growing number of adult ad networks are moving over to the mainstream scene.

“This also means that we need to adopt new and different ad formats to attract more publishers into the networks, [including] search ads, text ads and new mobile verticals that are needed to better serve the advertisers that are looking for more and more targeted visitors,” Skavhellen explains. “Adblock-friendly verticals are also important for every network to avoid losing the publisher’s traffic.”

“I think this is a very exciting time for the ad networks and the most innovative networks will win,” Skavhellen concludes. “You see new networks popping up every month, so it’s definitely not over yet.”