I’m not going to rag on Glam.com . . . I actually admire companies that take some chances, break some rules in the search for new business models and opportunities. So instead, I spent a better half of a sunday morning a few weeks back, when the news broke about their crazy round, doing some link analysis of all the affiliates in their “advertising network” trying to find out their secret sauce. (mental note: Allen & Co is THE place to go if you ever need to raise some money and don’t want to spend too much time begging VC’s). What I found was fascinating . . . (ok, maybe only to me)
Before I jump in, Jeremy Liew’s post about synthetic channels is an important piece on the vertical-ization of ad networks. Synthetics channels are the re-incarnation of private equity roll-ups which arbitrage between two ends of several spectrum around scale, focus/scope, and cost leverage.
Synthetic channels, like the channels on the big portals, have an advantage in this respect. By guaranteeing that all sites in their network are about a single topic, they can aggregate a critical mass in traffic while still enjoying endemic site RPMs. This is, in a sense, a “hack” to true contextual targeting, but it has the advantage of being simple to understand and hence simple to sell to advertisers.
While this is certainly interesting, what is even more amazing is what Glam (and other vertical ad networks) don’t explicitly tell you HOW they work as an ad network. Glam doesnt just syndicate advertising banners . . . they syndicate content as well as links.
Huh? you might ask? Glam serves up banner ads across their network of site. They also serve up content/posts from one affiliate to another. Often they embed advertising along with that content which they syndicate. Even more importantly, links within that content is also syndicated to its network participants.
Why is this such a big deal . . . ?
Ostensibly, the ability to guarantee the surrounding content of an ad unit helps increase CPM and reduces advertiser resistance/reluctance (rememeber that facebook UK debacle about advertisers and white supremacy groups?).
More sinister clever are the links that are syndicated across the network. . . . . Its all about SEO.
Many of these links points back to Glam.com, thus hugely increasing the main destination’s page rank, since from a search engine’s perspective, it looks like another domain is linking to Glam.com (Google has no idea that the link is being syndicated).
These links also cross pollinate across the entire network which give many new publishers/web site owners a good reason to join Glam . . . it raises their page rank significantly from the inflood of links from rest of the network. Due to a deficiency (?) of many search engines’ algorithm, these reciprocal links create a sort of “page rank network effects” that improve the rankings of the ENTIRE network each time a new site signs on.
Adding fuel to the fire, due to the freshness of the content being published constantly each day through out the network, these links are being built in a dynamic and consistent manner which is something search engine LOVES. The fact that all these sites are clustered around the same general topic also help search engines over-weight these links compared to other sources.
Blackhat or not, I gotta give these guys props for “inventing” something so insidious and executing it to perfection! . . .
