10+ Tips to get the most out of an Ad Network or Rep

Some of the most liveliest discussions here in the past have occurred around topics related to advertising networks.  Most of us have been an associated with an ad network at some point in time, some of us still are, while others have moved on to an ad rep or direct sales.  When joining an ad network or engaging an ad rep firm some sort of contract must be signed, however these contracts are far from boilerplate and most of us simply aren’t lawyers or don’t have the resources to retain one.  Here are 10+ things to consider when joining an ad rep firm:

1. Post-Term
If a rep firm or ad network has a post-term in the contract, where they still get paid on advertising (if they introduce your site to the advertiser)  you broker yourself or via another firm after the contract has ended , you should kill it if you can. Once the contract is up, the publisher needs to be totally free to do what he/she wants to do, without any claim to future revenues.  Gorilla Nation includes a post-term in their contracts.

2. Performance Clause
I would recommend some type of ratio of performance, where the ad rep firm is responsible to perform at a particular level. Especially, if a publisher has an exclusive deal, you need to make sure you are getting sufficient consideration every month if you are giving up exclusivity. You can put a performance clause in the contract such as for every 1M pageviews, the publisher needs to get 2K net revenue from the exclusive rep firm. If the site does 10M pageviews, the rep firm must perform and sell at least 20K per month on premium direct sales and if they don’t for 2-3 consecutive months, you should be able to get out of the contract. If a rep firm has a “star property” or anchor property, they will most likely focus on that property when pitching to advertisers, leaving the smaller publishers behind.

In addition to a performance clause, you need a clause that says the rep firm is responsible to provide with a quality service level. You want to think of as many “outs” as possible, with “outs” being options to get out of your contract.

3.  Leave Some Room to Sell Some of Your Inventory on Your Own
Leave some room for you to handle some of your direct sales. It’s important for publishers to build traffic and scale first but if you grow very fast, you need the flexibility to start selling a portion of your own ads, with your own direct sales team. You could select a category such as music to focus on and give the rest to the rep firm. As you get bigger and stronger, you can then negotiate more away from the rep firm.

4. Play Rep Firms Against Each Other
Negotiate from a position of power, once you find more than one rep firm that is interested, you should use this interest as leverage. “X is offering me a better deal, can you beat these terms”

5. Set Your Own Rate Card, Don’t rely on the rep firm
This needs to be in the contract. The rep firm may be trying to sell you too low or too high. You need full flexibility to determine the pricing of your brand/site. You can work with the rep firm but you should have complete control over your rate card.

6. Ask How Many Account Reps do they have per site within your vertical
If the reps are overly stretched and your site doesn’t have a large following 500 UV’s+, don’t expect a lot of attention and support.

7. Net Payment Terms
Anything beyond net 60 is suspect.  However, if the CPM’s are high and the partner has a good reputation, I think you can go with 90 but nothing beyond net 90.

8. Misc Fees Deducted from Your Revenue, on top of the revenue split
Beware of shady terms such as the ad network or rep firm having the ability to deduct fees from your revenue, in addition to the revenue share. Some firms will try to be slick and say they can deduct fees related to trafficking, ad serving, and sales, in addition to their revenue share. This is unacceptable and an obvious red flag.

9. How many employees does the rep firm have?
Beware of big promises. If a firm has 1-3 employees or the key executive you’re working with is working from home, these are obvious red flags. What this could mean is that this firm doesn’t have the bandwidth to effectively sell your brand to Fortune 500 companies.

10. Beware of firms that sell Black only, not Quality
If a rep firm is “selling” their business on the fact that is Black owned and not on the quality of their partners, sales, growth, financials, etc., this is a red flag.  You shouldn’t care who owns the rep firm and you should weigh firms on their merits and what they can do for your business.  Young “pro Black” publishers/bloggers often “buy into the kool aid” and get exploited by these type of ad shops. I personally had to threaten AdGroups after I smelled some “shady” dealings/practices. “I don’t care if you’re Black owned, where is my money?”

Bonus

11. Provision for M&A
If your website is acquired on a M&A deal, you need to be able to get out of the contract as an acquirer would most likely want to go in a different direction on ad sales. If you are “locked tight” into a contract, this may influence your deal price or prevent a deal from even going down. You need a “M&A out”.

12.  Beware of the Auto-renew
Some firms require a 30-45 days notice or they will auto rnew your contract and you could be stuck with them for another year.  Obviously this is not ideal especially if you are unhappy with the ad rep or they haven’t preformed to your expectations and you’d like to try alternatives.  If you are already in an auto-renew situation mark your calendar to send your contact termination notice.  Don’t get caught slippin’.  Gorilla Nation includes auto-renew in their standard contracts.

13. Consult an Online Advertising/New Media Lawyer No Matter What
Or someone who specializes in online advertising/new media. Even if you don’t have any money, you can find a lawyer who will work with you where you can pay them later or break up the balance into payments.  I don’t care how smart you think you are, if your site blows up, a bad deal or some “uneven” clause only a slick lawyer would understand who wrote the contract in the interest of the rep firm could end up costing you millions!