As a follow up to our earlier post of Think Publishing, Not Podcasting, I found Jason Calacanis’s post asking “Are ad networks for loser/weak publishers” a must read for anyone serious about building a publishing business.

Jason argues that if you are serious about building a publishing business you need to take control of your advertising sales. I could not agree more. Jason says that if you’re under $250,000 in revenue then ad networks are ok, but over $250,000 in revenue you should hire a sales person and build your own advertising revenue stream.

I think you should start a lot earlier - If you have a focused, high value audience you can get premium or even Super Premium ad deals. Just look at Grape Radio as an example. They have a great, high value audience and they get premium rates given their audience size.

The problem comes from the huge surplus of inventory available and publisher’s desire to get some money for that remnant inventory. This remnant inventory can be a big problem for publishers.PaidContent puts the rate at between 20-70 percent.

wide range of avails that go unsold at a given time can run from 20- to 70 percent of a site’s inventory

When you turn to ad networks to fill this remnant inventory, you get the same ads as everyone else, they probably won’t fit with your brand and you diminish the value of your direct sales.

Jason points out that giving away inventory creates a major problem. I agree completely.

Many of my friends give their inventory away to 3rd party networks and I’ve told them in no uncertain terms they are fools–really, really fools. In order to be a REAL publisher you must have control of three relationships:

1. Your writers
2. Your readers
3. Your advertisers

And I would add to that list - your community which consists of the relationships between your readers, your writers and your advertisers. If you treat those relationships with value, I believe it will return to you multi-fold.

Don’t make the mistake of thinking of your space as only useful for advertising. If you can’t get good ads for the space, then start thinking about how to use the space as currency within your community. And you want your currency to be as valuable as possible.

Think about how to use it to further relationships. Think of ways to allow readers to interact with other readers. Think of ways to promote your writer’s relationships with readers.

How can you do that? Here’s a few ideas. Run a contest, with ad space as one of the prizes. Promote the best comment of the day/week. Feature premium/dvd/cd content packaged from your writer’s archives. Ad video to your posts with writers adding color commentary to what they’ve published.

Your inventory is as valuable as your creativity can make it. Be creative, build a community based economy and good money will come your way.

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