Joelle Gropper Kaufman, VP of Marketing at Adify, explained to AdMarkTech the reasons why Adify is different from its competitors and how Adify’s visionaries are leading the race in vertical ad network technology.

Founded by people who possessed a vast wealth of knowledge in the realm of Internet marketing, Adify pulled away from the crowd by distinguishing premium, content rich, media portals from sites that, despite high number of impressions, had relatively low content value.

Large, established advertising networks such as Google, Flycast and Value Click realized some time ago that there was a lot of online inventory on recognizable brand name sites. However, this large inventory just wasn’t as valuable as other areas of the same site. For example, chat rooms, forums and email areas do not hold the same advertising value as editorial content. With this in mind, remnant networks recognized that by aggregating all of that ‘sub premium’ content together they could put ads in front of millions of users.

For Advertising.Com, that number is now well over 100 million users. For Google the number is standing at around 147 million users. Despite the massive reach, the ads are not next to the premium content and advertisers have little or no control of their textual positioning. On the flipside however, ads are cheaply put in front of (served to) millions of people and some of them will directly respond and transact with the advertiser. This is direct response advertising on a remnant network.

Two and a half years ago Adify recognized that there was a tremendous adoption of the internet by every day users. In addition a huge volume of the audience of advertisers wanted to broaden their online reading. As a consequence, advertising dollars began to move online at a very fast pace. Media companies that had existing relationships with solid advertisers were running out of inventory due to demand for editorially based advertising. Basically there were more advertising dollars than there was premium advertising space. At this time, Adify spotted that every major media company would have this problem.

Adify categorized three types of client:

1. The Martha Stewart type web site that consisted of a solid website and a fabulous brand coupled with existing relationships with advertisers but not enough online premium inventory.
2. Venture backed startups that would take advantage of the opportunity to aggregate content and become media companies.
3. Individual entrepreneurs who would aggregate content because they had relationships with publishers and advertisers and could build their own media companies.

Adify concluded that all three of these types of customers would need purpose built, comprehensive technology to manage the relationship with their publishers, target and deliver advertising in any size and any format, have absolute control over what sites the ads would run on, which advertisers are accepted by publishers, the ability to syndicate content and do real time reporting to publishers, advertisers and the network builders. And finally, calculate how all the money would be distributed to the various participants in this value chain.

Adify founders identified the following two trends:

1. More money was coming online faster than content could be developed and traffic driven to it.
2. Fragmentation of the audience. Every year the percent of time being spent on the top 20 sites declines. It’s currently at 36% according to ComScore. A year ago it was closer to 40%. More people are going to alternative Internet destinations to find the content they want to read.

Based on these two trends, Adify built a completely integrated platform that provides everything a media company or an entrepreneur would need in order to roll out a vertical advertising network consisting of premium independent niche online publishers that can control and sell inventory to advertisers. This is the definition of a vertical advertising network.

The client list at Adify is growing but among the high profile clients are Martha Stewart’s Circle, Forbes 400 Blogger Network, the UK’s Guardian newspaper and Reuters to name but a few.

Adify provides all of the workflow for a publisher to be invited, apply and be reviewed and accepted. “So when we provide the data to our customers they choose the sites they would like to invite, they structure their own relationship with those sites. Once those sites agree that they would like to be a part of that vertical ad network, they can sign in through a white label version of Adify. They can get all their information, all the technical tags they need and the ability to redirect unsold inventory to a remnant provider like Google.”

Adify have created a service combined with outsource operations, in order to make it very efficient for people to build quality vertical advertising networks. They handle, on behalf of their clients, the operational process including publisher support and payments.

“We don’t charge people big upfront dollars, we don’t ask for minimum guarantees, we partner with our customers to build new businesses and then we participate in the value created by those new businesses.”

“We use over six different data sources and a whole set of algorithms to inspect various different sites, capture what we can about their demographics, their content, their traffic, their CPM and we put that together into a report that can be easily analyzed by our customers.”

Adify supplies clients with a list of a few hundred sites that are candidates. In turn, the client’s editorial team investigates and selects the sites that they wish to invite.

“This is different than when people talk about a vertical ad network that has 4,000 advertisers and you can just grab from them. The quality of the Martha’s Circle site is so high, the advertiser can go visit them and feel absolutely comfortable that when they’re buying Martha and Martha’s Circle they are getting equivalent quality, equivalent reach.”

“It’s exactly like handpicking affiliates with the purpose of having a long term relationship. It makes a big difference. The relationships you have with the publishers are more intimate, that means you can provide more information to your advertisers and you can provide a higher engaged audience to the advertiser.”

A year ago Adify had 25 employees and three networks. Today they have around 80 employees and have publicly announced 90 networks.

The future is looking bright for Adify, “We recently added the capability to syndicate content within a network through Adify’s widget share. This doesn’t sound like something that has anything to do with advertising, but it does have to do with building a media network and building a community of publishers that is engaged and actively involved in attracting users.”

“Content syndication allows our network partners to create any sort of widget, distribute it through Adify to their selected publishers and provide their publishers with exclusive content with traffic building capabilities and badging that says ‘I have been chosen’.”

“Those are very exciting new pieces of technology that we have built on our platform. We introduced behavioral targeting so that you can re target customers who have visited your website when they are on networks covered by Adify. We are introducing more functionality to increase the amount of information at the fingertips of the network builder, in order to best sell their network.”

“We are finding that our customers find our technology to be intuitive, configurable and reliable so much so that they’d like to use it even beyond the vertical ad network. There’s a lot of opportunities for Adify to expand our customer base.”

For more information, Adify will be exhibiting at Ad Tech, San Francisco, April 15 – 17, 2008.