The Evolution of Ad Networks
Posted: October 3, 2008 | 9:28 ET by Tessa Wegert
Ad networks haven't always held the status that they enjoy today. Over the years, as more networks have formed and those existing ones have expanded, interactive strategists have had to question their worth. Can they deliver quality inventory that's on par with our clients' high standards, now that they represent such a plethora of sites? Anyone who has spent time on the publishing side of our business knows not all networks play by the same set of rules where accepting new publishing partners is concerned, and this can result in a sub-par roster of sites on which we could potentially find our brands.
Another issue at the forefront of marketers' minds is whether a network buy necessitates fear over the context in which ads will appear. The emergence and growth of contextual marketing technology has made this a very tangible concern. We've all come across contextually-placed ads that cast a negative shadow over the product--a cheerful banner for an auto brand, for example, placed alongside an article about a devastating car accident. Such incidents are difficult enough to monitor on individual sites, let alone when banners are spread across dozens of properties through a network buy.
The Benefits of a Network BuyOf course it's not all bad--far from it. Ad networks, especially a handful of superior players, have a lot to offer online advertisers, and their value isn't going unnoticed. According to a recent report published by the IAB (Interactive Advertising Bureau), major advertisers "view ad networks as an effective way to achieve greater buying scale and drive down CPMs," and thus are allocating "significant portions of their advertising budgets" to network buys.
Ad network pricing has always been a motivating factor for advertisers. Because many networks primarily sell remnant or "leftover" inventory, they're able to price it more competitively than the premium placements sold directly by a site publisher's sales force. Even networks that serve up this premium inventory on behalf of sites can often do so at a reduced price, as sites strive to unload as much of their overall ad space as possible every month (many sites produce a far greater supply of ad space than the market demands).
Another benefit to advertisers is the way in which networks have managed to streamline the media buying process. A network buy often requires a single insertion order for placements on dozens of sites. The alternative is to negotiate buys from each of those sites directly, and you can imagine the resources required to pull that off for a single campaign alone.
Certain recent trends in ad networks have also made them more appealing. The emergence of "vertical networks"--networks that focus on a specific industry vertical, such as travel, technology, or automotive--facilitate more precise audience targeting and tend to deliver a more engaged audience due to the specialization of site content. Because they amalgamate sites related to a certain subject matter, they also ensure that marketers spend their ad dollars only on sites that are completely appropriate for their products and campaigns.
This is a major shift from days past, when as a rule networks didn't pick and choose their sites based on content. Instead, they worked with a broad range of sites and allowed marketers to narrow down their reach by targeting through established content channels. Some of these "horizontal networks" still exist today, but have improved on their original model with enhanced targeting options and a better quality of sites to tender.
Growth Breeds OpportunityBy some accounts there are between 200 and 400 ad networks actively operating today. In Canada, and for marketers targeting Canadian Internet users, our options are slightly more limited as not all networks can boast a sizeable Canadian audience. Fortunately, the larger, more established networks (in other words, those we'd be apt to consider anyway) have a strong Canadian presence, and even maintain Canadian offices to better service our advertising needs.
Our other option is to work with Canadian-specific networks--those that partner exclusively with Canadian sites or specialize in Canadian inventory. Several have emerged in recent years to offer Canadian marketers access to top-tier sites at a more favorable price, and help them simplify the buying process by consolidating their national and regional options.
In my next article, I'll offer a roundup of some of the best ad network options for Canadian marketers, along with an overview of what makes each one worthy of a closer look. These networks have the quality inventory, passionate audience, and category reach we as advertisers look for to make our campaigns a success.
Tessa Wegert is a veteran Internet media strategist and writer covering interactive marketing and technology. For links to her past articles and columns visit tessawegert.com, or connect with her on Facebook and LinkedIn.
Read more Interactive Strategist< Next PostPrevious Post >
Tessa Wegert is a veteran media strategist with a background in media planning and buying, content development, ad copywriting, and campaign management. As a prominent industry writer she has been covering digital marketing and technology for leading newspapers and trade publications for over a decade. Connect with her on Twitter (@tessawegert) and LinkedIn.