The Wall Street Journal is one of the latest to point out that the field of ad networks is overcrowded. Expect a steady stream over the next number of months of ad networks closing their doors, laying people off or consolidating. For ad operations it’s important to prepare for the possibility that a network partner might shut down. Hopefully, all that means is moving to another network, but having gone through myself a few years ago, it can also mean non-payment, unresponsive ad tags and missed revenue goals. Here are some ideas of how to proactively protect yourself from failed ad networks:

Diversify your ad network portfolio: Depending on your reliance for ad network revenue, it’s best to have relationships with multiple networks. Even if you are only running network at a time, in the event it stops, you’ll want a back up network ready to go. If you run multiple networks, you’ll want to think through reallocation of impressions if it becomes necessary.

Protect yourself: Make sure your legal team is looking at all ad network deals and make sure you understand what protections exist in case of problems. Make sure your legal team understands how networks work and the inherent risks that come with them. As the department responsible for the ad network relationships, you need to know what the contract says. Additionally, make sure a thorough credit check is done.

Keep tabs on your networks: Keeping tabs can mean talking with a network representative on a frequent basis to keeping track of their payment schedule. A huge change in the number of campaigns running through a network might indicate problems or a new business model and should be investigated. Additionally, keep a test page for each network where you can quickly check for latency issues.

Align with the right partners: The reason that some ad networks will fail is because they don’t offer enough differentiation from their competitors. If that’s the case, why do you think the networks you are working with are going to succeed? Most likely the answer is going to lie in their ability to provide advertisers value that aligns well with your site’s audience. If the value equation is weak, you should be concerned.

Outsource: Network optimization companies like AdMeld, PubMatic and Rubicon Project are there to assist with ad network management and they monitor the ad network space. Make sure you understand how they handle ad network problems and what protections are in place for you. This is one of the reasons to consider using a network optimization company.

If you and your company have decided that ad networks can help reach your revenue goals, the key is to truly manage those relationships. The risks involved in working with ad networks is more dependent on your approach to them than the ad networks themselves. If you do the proper due diligence and protect yourself, you will most likely be working with the ad networks that will be around for some time to come.

Rob Beeler is Vice President of Content and Media for AdMonsters and has worked in Ad Operations for over ten years. Rob started attending AdMonster events in 2004 as a member and will be in New Orleans on March 8th for Publisher Forum US XX.

In our last update we provided some highlights from Bowen’s talk at DPAC II early last week about the need for renewed and increased focus on operational excellence in online ad operations.

Later in the week we attended the fourth annual IAB Ad Operations Summit, held October 30, 2008, at the Roosevelt Hotel in New York. It was impressive to see how much the Summit has grown since its inception in 2005. It was a full house of ad ops folks from across the industry, and the number and seniority of the attendees reflects how far ad operations has come as a practice since its inception in the mid-nineties.

This year’s Summit was infused with concerns about the impact of the economic “downturn” on online advertising, balanced by optimism born of recent progress towards resolving some of the long-standing pain points in online advertising. From the opening “War on Discrepancies” presentation to the final panel (moderated by AdMonsters CEO Bowen Dwelle) on developing ad operations talent, the apprehension and uncertainty over what 2009 may bring was offset by clear evidence that we are maturing as an industry.

Highlights of the agenda included discussion and early release of two industry initiatives (Impression Exchange and EDI), as well as release of a highly detailed ad operations best practices document. All three of these efforts show great promise - provided of course that we all heed the call to actually implement the methods and standards that were put forward. As AdMonsters approaches our 10 year anniversary (in 2009), we recognize these initiatives as real movement in areas that have long been discussed by members of the ad operations community. As the only professional association exclusively dedicated to online ad operations and technology, AdMonsters has its eyes and ears in the trenches of day-to-day ad operations, and we’re happy to see that these conversations and early efforts have borne fruit and come to formal expression. Although our role in the industry is different from that of the IAB, as always our goal is to work together to further our common goals, and we look forward to facilitating ongoing dialog about these initiatives at AdMonsters fourms, hopefully leading to real change and improvement in online ad operations processes.

The beta release of the Interactive E-Business Standard (EDI) marks the first formal, industry-wide effort that will begin to allow the automation of data flows between the myriad systems involved in online advertising. This is essential work for online advertising to evolve beyond its current adolescent phase into young adulthood, and for ad spending online to catch up to consumer time spent online. I recall Ben Reid’s original vision for “OARS” being discussed at AdMonsters XIII in 2005, and it’s fantastic to see that the work that has gone into this effort from all parties is finally bearing fruit.

The proposed Impression Exchange is extremely promising and I’m sure that many publishers can’t wait to see how this plays out. While an impression exchange wouldn’t itself ‘resolve’ discrepancies, the goal is to provide publishers the data required to catch discrepancies earlier in the campaign life cycle, analyze them and then respond to them, before the campaign has been put to bed. This new transparency into the actual numbers will help to recapture impressions and dollars currently lost to incorrect trafficking and under-delivery.

Those involved in these initiatives and IAB Ad Ops Summit should be proud of what they have accomplished. These initiatives are major steps forward for an industry that needs them desperately, and it’s important that companies in the field work to understand and begin to implement these proposals. While some companies may find 2009 to be a trying time, it’s important to remember that down cycles are often the best times to invest internally, in the quality, efficiency and reliability of their operations. As always, we look forward to helping to make that happen.

Bowen Dwelle, founder and CEO of AdMonsters, spoke at the second Digital Publishing and Advertising conference (DPAC II) on Tuesday, October 27, 2008 in New York on the need for a renewed focus on operational excellence. In his presentation, “Operations Reality Check”, Bowen incorporated themes from the conference: continued growth - hampered by crippling inefficiencies - in online media and advertising, and a broad economic downturn, and demonstrated how these factors point to the need for greater investment in online advertising operations. “Online ad operations is far more strategic than commonly considered to be. The ‘ad ops success story’ is twofold: bringing better value to customers through higher-quality advertising results, and bringing better value to media organizations themselves by providing critical business intelligence for strategic management.” As David Cohen of Universal McCann pointed out during an earlier panel session, “the ‘flight to digital’ will continue, but the downturn will weed out companies that cannot operate efficiently.” Building on David’s comment, Bowen said, “David couldn’t have stated it more clearly - online media leaders must spend more time in ‘operations territory’ if they want to survive the challenging times ahead. In fact, the “downturn” is also an opportunity, and companies that can operate efficiently will be rewarded, more than ever.”