1. Clarify your offering. Who are your primary visitors? What kinds of advertisers do you want to attract?

Let’s say your content is all about the sport of rock climbing. You could recruit other similar websites and form the Rock Climbing Network, or you could open it up to skiing, fly fishing, kayaking, etc. and create The Outdoor Enthusiast Network.

Whatever you choose, just make sure you are are clear about the audience and the exact value proposition.

2. Tee up a few “friendlies.” Identify some publishers in the space and initiate conversations with them about your concept for a network in your common vertical.

Get verbal agreements that they will follow through on the idea, should you succeed in bringing in the right amount of desired advertisers. Then create a larger list of possible partners of about 20 additional sites that you plan on including in your outreach.

3. Choose a network management platform. To efficiently manage all of the moving pieces in your network, you’re going to need to license a network technology. In the past year, the number of available platforms has nearly doubled; there are now more than a dozen providers to choose from.

While you might be tempted to make your choice based on a personal recommendation, or pick the first one that seems to fit the criteria, it’s better to carefully research all of the options and select the platform that will satisfy both your short-term and long-term needs.

Don’t know where to start? See a shortlist of platforms.

4. Develop a set of unique ad products. Why should an advertiser work with you, over a bigger ad network? A smaller network maintains a close connection with its sites and fully understands its evolving audience, so it can be more creative with ad offerings and can execute higher impact campaigns.

The Rock Climbing Network could, for instance, support a contest sponsored by a climbing gear company on the homepages of its member sites, asking readers to share stories of their most treacherous climb. REI could participate in a series of product reviews that link back to their retail site.

Surely, these offerings beat buying five million untargeted banner ads from an ad network with 10,000 sites.

5. Scale the business. Invest in the most important resources: a solution for publisher outreach and your ad sales and operations team. You can’t build a network without publisher partners, and you can’t make those big advertisers you’ve just landed happy unless everything is running smoothly.

The best way to steadily increase your revenue stream is to ensure advertiser renewals. Before you know it, you’ll be able to toss out the big ad networks completely — and start to realize your inventory’s true potential.

Do ad networks help monetize remnant inventory or hurt a media company’s ability to charge premium CPMs? There are cases to be made on both sides, but the question remains how can a publisher take advantage of this trend in ad spending? One way to attack the issue is to start your own ad network and charge the rates that are appropriate. If you can’t beat ‘em, join ‘em.

Luckily, there is a no-cost process to evaluate the potential for a vertical ad network in your space. Let’s get started!

Market potential for a vertical ad network
Begin by evaluating prospects for your ad network. You don’t want to target key accounts for this initiative unless they are spending WAY more money elsewhere. Instead, focus on advertisers who run larger campaigns where your properties’ individual reach is too small to get on the radar for the RFP. Put together a list of prospects that you could go after, the agencies they work with, and poll your team to identify the contacts that you have within those agencies. If you have 30 or more prospects overall, there is enough market potential to proceed.

Use Quantcast to measure audience reach, demos, behavior
Becoming a “Quantified” publisher can be as easy as dropping some JavaScript on your sites’ design templates (five minutes per site). However, I urge you to sit down and develop a plan before you start. Remember that ad networks aggregate sites for reach leading to lower CPM’s but then use behavioral targeting to ratchet pricing back up. So, you’ll want to think about how you can segment your audience.

For example, look at the CBS Networks Quantcast profile. You’ll see that they do break out their traffic by site, but they also break out traffic by segment. They even have created custom segments for sponsorships. That’s a great way to provide additional value to top tier advertisers. Another example is Gawker Media Network, who has created two major segments GawkerGeek and GawkerChic.

In both cases, you can see how measuring audience across sites can add scale and targeted advertising interest. The key is to set up your segments to fit your prospects’ marketing needs. Remember that you don’t have to roll up sites into segments, you can roll up several sections of sites into a segment. If you are a B2B publisher with 10 sites, you can create a small business audience segment which targets the small business section of those 10 sites. For a newspaper company, it could be all of your real estate traffic which would then be marketed to lending institutions. For consumer sites, the options are endless.

Ensure sufficient scale
There are two ways to go about this analysis, anecdotal evidence or quantifiable evidence. Publishers can poll the agencies that they currently work with and ask them if your Quantcast numbers are large enough to get on the radar for some of these larger buys, or you could use Quantcast’s media planner to see if you come up in the results for segments that you are targeting.

If you are still lacking the necessary reach, use Quantcast’s “Audience Also Visits” data to target potential partners and approach them about joining your ad network. Sell them on your ability to sell their inventory at higher CPM’s than traditional ad networks. You might also identify ad networks that you could partner with. If you can sell their inventory at a higher net CPM (the CPM they get based on revenue share), they will take your money.

Implement behavioral technologies
Companies like DoubleClick and Adify offer the technologies necessary to build, target, and measure results in a similar fashion to the big ad networks. If you are going to run with the big dogs, you want to be able to provide the same type of targeting capabilities that agencies have come to expect from them.

Market your network
While Quantcast has a service for media planners, most agencies use Nielsen or comScore to search for, identify, and select media partners. In order to get on the RFP’s for these major buys, you are going to need to have some presence there. This can run as high as $60k, but that investment can be made back in just one buy. Talk to the agencies that you anticipate working with, and ask them about their RFP process, what services they use to select RFP participants, and how to ensure that you are on their radar.

Servicing your clients
The best way to ensure success is to provide the best campaign optimization around. Monitor your ad network campaigns constantly and recommend adjustments before the agency even knows there is a problem. If you make the agency’s job easier, they’ll prefer you over the big players because your campaigns will perform better with less work. The difference between $500k in revenue and $5 million in revenue lies here because your reputation for delivering quality performance with less effort will create a relationship that leads to more business. I’ve seen campaigns grow from $30k to $150k in a quarter because of proactive campaign optimization.

Final thoughts
All of the above require planning, effort, and time. So, developing an ad network isn’t a silver bullet, but based on the projected growth of this segment of the online advertising market, it’s an investment worth making.