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Will Ad Networks Save Online Advertising?

Will Ad Networks Save Online Advertising? Jim Meskauskas

Another record-breaking year for online advertising has just ended.

Although the final numbers aren't yet in, it looks lie something around $16 billion or more will have been spent in online advertising. Talking to someone the other day, I was told the early estimated spend for 2007 will be in the neighborhood of $20 billion.

The question before the industry is, just where is all of this money going to go?

There are only so many search words and phrases that possess any kind of real commercial viability for advertisers. There are only so many searches to do. And although Google's recent implementation of an opaque qualitative scoring system that preferences words and phrases based on something other than just a formula of a bidded-out cost-per-click and a clickthrough rate -- and with other search properties following suit -- will create some additional scale, there is only so far this can go.

Highly branded websites with content pages that have affinity with an advertiser's product or service sustain only so much audience. In spite of the promises for single-serving behavioral targeting on one site to convert blind run-of-site impressions into desirable inventory, the appetite for it has been less than expected. 

And finally, audience growth online, at least in the U.S., isn't keeping pace with demand for specific inventory.

Ad networks hold out hope for being one of the only really scalable repositories for the estimated deluge of online spending.

Ad networks have access to a massive amount of inventory. They can often be less expensive than standard tier-one sites. The array of technologies developed can yield efficiencies that those standard tier one sites can't often match.

Sure, all of that may be true, you say. But advertisers like the big, flashy, well-branded sites. And they like branding.

Yes, they do. But what needs to be understood is that the audience is what matters most-- more than where the audience is found. And if where these audiences are found are places where those audiences have chosen to be, even if it is a place you haven't heard of, what's wrong with that?

We all know that an ad in a bad place can have a negative impact. But does being on a site the advertiser is familiar with versus one it has not, so long as the audience is right, have a more positive impact?

None of this is to say that buying within ad networks is better than buying a highly branded single site. It is to say, however, that advertisers need to think more seriously about ad networks in addition to those sites.

Networks have the potential for scale. They offer reach across a large unduplicated audience, and audience engaged with a media offering about which that audience is potentially passionate.  An individual blue grass fan visiting a blue grass site is going to have more connection with that media vehicle than the blue grass fan who is visiting Weather.com.

The key things to remember are:

1. Does the network have a solid content screening policy to weed out unwanted content?
2. Is the technology sound for both delivering and tracking the advertising being run?
3. Are the audiences identifiable?

If advertisers can care a little more about the book and less about its cover, there is a vast wealth of opportunity for then with ad networks.

Media Strategies Editor Jim Meskauskas is vice president and director of online media for ICON International, Inc., an Omnicom Company. .

Jim Meskauskas is a Partner and Co-Founder of Media Darwin, Inc., providing comprehensive media strategy and planning.  Prior to that, Jim was the SVP of Online Media at ICON International, an Omnicom Company, where he spent nearly five years.

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