People new to the advertising industry struggle with its jargon, and figuring out the difference between advertisers and publishers can be tricky. By the end of 2022, however, the total amount that brands or companies will spend online is estimated to reach a whopping US$616 billion. As such, people entering this area of business need to get to grips with its lexicon fast.
By the end of reading this article, you will understand, among other things, who advertisers are, what publishers do, and what role ad networks play, helping you to get started in this corner of commerce.
Knowing the difference between advertisers and publishers is the first step to understanding how advertising works in digital marketing.
Who is an advertiser?
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Advertisers are companies or businesses offering products and services. They want their products and services to reach their target audience. As a result, advertisers rely on third-party companies or individuals, also known as publishers, to run their ads and campaigns. Advertisers are also known as ‘merchants’ or ‘retailers.’ When it comes to mobile advertising, advertisers are apps or brands that want to spread a specific message. For example, you can consider a strategy game or a shopping app as an advertiser.
In a nutshell, these are brands or companies looking for ad space to run their advertising campaigns.
Their ultimate goal is to get traffic to their website or product landing page from the publishers. Thus, these companies set rules when they create an offer. These rules prescribe the following information:
- Methods publishers can use to promote the ads
- Type of traffic they expect their website/landing page to generate
- Ad formats that publishers can use
- The locations publishers should place ads
- How they plan to promote the product or service they have developed
Advertisers spend money on building or developing a product and ad creation and then circulate the ad online. They depend entirely on return on investment (ROI) to thrive. Their success depends entirely on how much revenue these campaigns generate.
One technique advertisers use to set up their ads is Google Adwords. Advertisers include big companies as well as small businesses and individual affiliates. Regardless of size, all of them have one goal: to sell their products and services to people online. Now, this is where publishers step in.
Who are publishers?
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Publishers are crucial for advertising. Likewise, without advertisers, there is no way publishers can thrive. Like advertisers, publishers can be both large and small companies as well as individuals.
They are mainly responsible for linking the advertiser’s product or service to customers or end-users. They help advertisers with traffic, and they get paid for the services they offer advertisers.
To generate greater monetization rates using traffic, publishers should search for the best offers available online.
Publishers can be any of the following:
- Media buyers that buy traffic from ad networks
- Social media marketers or influencers that get traffic on social media platforms
- Webmasters that can get organic traffic to the website
- Blog owners
- Video content creators like YouTube Vloggers
- Software platforms
- Mobile games/apps
- Podcast producers
Here is a list of some of the ad publishers you may already know:
Content creators are known as publishers because they publish their creations online. Different publishers use different tactics to generate traffic. It is also essential to understand that traffic performance differs per the tactics publishers use to generate them.
Publishers also work on Adsense, where they run ads and get paid for their services.
Though the names differ, advertisers and publishers do the same task under different roles.
Now that you understand the main difference between advertisers and publishers, it is crucial to understand the role ad networks play.
What is the role of an ad network?
In a nutshell, ad networks are mediators between advertisers and publishers. They assist advertisers in connecting with a pool of publishers in their database.
Managing publishers is challenging and one of the key reasons many advertisers depend on ad networks to help them connect with publishers. They also vet publishers, making it easy for advertisers to work with them.
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Differences between marketers, publishers, and affiliates
An affiliate is a third-party company or individual promoting a company’s products or services. They earn money based on the number of leads or sales they generate.
A marketer is a broader term and might refer to any person promoting a particular message. A marketer’s remunerations potential depends on their industry experience, skills, and expertise.
Publishers include anyone that creates and publishes their own content online. They usually earn money by monetizing ad space, getting donations from visitors online, and selling their content.
While these are the key differences, it’s possible for these roles to be undertaken partially or entirely by a single individual or company. Since publishers have diverse methods to earn income online, they might embrace different tactics to generate revenue.
What is conversion?
Advertisers get assistance from publishers by demonstrating the earning potential from generating leads or sales on their behalf. Most advertisers use the Cost Per Action (CPA) model. CPA is determined via Lifetime Values (LTV) and Average Revenue Per User (ARPU). Out of these two metrics, the LTV is critical.
Using this information, advertisers frame their payment model and structure. LTV refers to the projection of how much revenue a company will generate from an end-user during its lifetime. It is the average amount customers spend using the advertiser’s products or services.
Another indicator that they use is the ARPU. This metric helps advertisers decide how much they are able to pay publishers when they generate sales or leads.
Advertisers usually pay publishers in two ways:
- Cost Per Action (CPA)
- Cost Per Install (CPI)
However, the amount they pay publishers is normally less than LTV. The difference between LTV and payout method (CPA/CPI) is the margin the advertisers take for profit. This is the main reason advertisers usually do not bother with numbers, focusing on quality leads and/or sales instead.
The logic behind this ethos is this: If there are a number of quality users, your ARPU will be high. And if your LTV is also high, advertisers will therefore have more money to spend on ads.
If you want to work in advertising, understanding the difference between advertisers and publishers is vital. Beginners – and even some marketers – get confused with terms such as ‘publishers,’ ‘ad network,’ and ‘advertiser.’ Understanding these roles will help marketers perform their duties optimally.