By Adam Ward

Thanks to the Internet, differentiation between media companies is blurring. Newspaper photographers now shoot video for their websites. Broadcast companies offer classified ads on their sites. Bloggers report local news, and news reporters blog.

However, when it comes to advertising on these different media, the available technologies still cater specifically to a single medium. Newspaper software differs from television software which differs from radio software which differs from online software. Because I’m most familiar with newspaper software and online software, I’m going to focus on the difference between those two.

Newspaper business systems (e.g. AdPro, MediaSpan, SCS) refer to themselves as ad-tracking software. Although they are correct insofar as they keep track of the booking, pricing, sizing and billing of ads, they don’t track the effectiveness of the ads. That’s a major difference from online ad-tracking systems. Another major distinction is print publishers are the ones paying for and managing the newspaper software, whereas online publishers piggyback on someone else’s software, usually at no cost to them.

Although business software is the most complex software used by newspapers, here’s a simple example of how it works. Once a newspaper gets a system up and running (which takes a lot of customization, training and money, by the way), the system knows the rates and ad sizes for all publications offered by that newspaper. Someone at the newspaper then enters an insertion order into the system. For example, let’s assume the ad is a 4X5 ad (four columns by five inches tall) that costs $20 a column inch. The ad-entry person finds the advertiser in their system, enters a new 4X5 ad for them, the system prices it at $400 ($20 X 20 inches), and saves it. Unlike online ad-tracking systems used by publishers through affiliate networks, newspapers control what they charge for ads running through their system.

Because the business system contains an accounts-receivable system, it will either place the ad on hold if the advertiser doesn’t have enough credit, or approve it. The ad-entry person can also enter a payment for that advertiser and apply it to the ad. The system allows newspapers to send out a monthly bill to the advertiser showing all the ads that ran and the total due. Once the advertiser remits payment, an accounting person will enter that payment into the system and apply it to the appropriate ads or invoices.

Some business systems also have modules for managing the actual creatives (the ads themselves), as well as keeping track of the orders for online ads. But they usually don’t manage the uploading of those ads, or tracking the customer responses to those ads. That’s where online ad-tracking systems come in.

Online publishers who want to place ads on their sites often use affiliate networks to manage the ad tracking for them. Networks can either be open networks or exchanges (e.g. Commission Junction or ShareASale), where the publishers are responsible for choosing which advertising campaigns they want to run, or they can be closed networks (e.g. AvantLink or Affiliate Traction) where the networks manage the campaigns for the advertisers.

Whichever type of network the publishers join, they will use that network’s ad-tracking software. Each network uses either an ad-tracking system they built in-house, or a commercial tracking system (e.g. DirectTrack or LinkTrust). The networks allow publishers to log into their tracking system. If a publisher joins multiple networks, the publisher will have access to all the systems used by those networks.

Once logged in, publishers grab the HTML code for whatever ad campaigns they decide to run. When they paste that code into their websites, the code refers back to the tracking software to pull in the creative for the ad, direct users to the advertiser’s landing page when clicked, and track the impression, click and ultimate lead or sale.

The publishers are also able to see the stats from the campaigns they run so they can see the number of impressions, clicks, sales and—most important—the commission they expect to receive as a result of running that campaign. Unlike newspaper software where only the newspaper has access to the system, both publishers and advertisers have access to online tracking systems so they both know how successful the campaigns are. Online tracking systems also differ from newspaper systems in that the advertisers are the ones that dictate what the cost of the campaign will be, and the actual payout isn’t known until after the campaign has been running. With newspaper ads, an advertiser knows exactly what the ad will cost before the ad runs. With online tracking systems, although the advertiser and publisher have an idea of what the cost for each lead or sale might be, the total cost is dependent on how the ad actually performs. That’s why affiliate marketing is also referred to as performance marketing.

Online tracking systems do a pretty good job of tracking ad performance (unfortunately there are still ways to defraud the systems, but that’s another topic), and they can tell you what the payout should be. But that’s where they stop. Unlike newspaper business systems that have robust accounts-receivable features, online systems don’t handle billing, receivables, etc. They expect you to export that data (or enter it manually) into Quickbooks.

Maybe someday newspaper business systems will track effectiveness like online systems, and online systems will handle receivables as well as newspaper systems. But the more systemic differences between the systems, particularly which entities have access to the system and which entities dictate the costs of ads, suggest we won’t see the blurring of tracking systems like we’ve seen with the blurring of the media themselves.