For a long time, ad networks were considered repositories of remnant, low-cost inventory; the "bottom of the barrel." However, in recent years the legitimization of the ad network model has been a boon to both advertisers and publishers. Almost every premium site allocates some of its inventory to the ad networks, and the networks offer advertisers relatively efficient, scalable inventory opportunities. Now that the model has been validated for web advertising, new networks are cropping up to address myriad niche opportunities: video, mobile, games, RSS feeds and podcasts.
Most of these companies operate similarly to DoubleClick in its very early days, as both a network and an enabling technology. However, while the market has become flooded with startups looking to establish an early beachhead in these categories, most of these technologies and platforms are still in their infancy. Many of them are plagued by infrastructure challenges and deployment complexities. There is also a lack of standardization that adds to the difficulty of executing buys. Additionally, CPMs vary widely and are relatively high for platforms that are still proving their efficacy.
Scale is another stumbling block, since there is a lack of available inventory in some categories. Many of these platforms suffer from a chicken and egg dilemma, as they try to grow advertiser demand and advertisers wait until the media matures. While advertiser demand is still low, it is growing, in some cases quite rapidly. Yet not every platform, device and opportunity is right for every advertiser.
To help you cut through the complexity, here are brief descriptions of the major characteristics of today's niche ad networks, each one accompanied by a list of ad networks that fit the descriptions.
Note: Many of the networks we list in the following pages offer a range of services and therefore appear in multiple appropriate categories.
RSS feeds and blogs represent a seldom-used opportunity for publishers to better monetize their content. A year or two ago, there was debate over whether advertising in feeds was viable and, if so, if it was it worth it or would it repel subscribers? These questions are moot today, as subscriber resistance has been minimal and an increasing number of advertisers are inserting their messages into RSS feeds. Additionally, Google's entrance into the marketplace helped validate the model when it acquired Feedburner last month. Feedburner, as well as Pheedo, provides enabling technologies for advertisers to insert their feed into outside RSS feeds. They also represent a network of sites with RSS feeds that can be bought by advertisers, which allows advertisers to dynamically insert both text and graphics into the network of feeds.
Targeting, for the most part, can be done contextually by category of sites. The most effective RSS advertising is related to the feed's content and is content-driven. Another advantage to RSS feed advertising is the relative lack of clutter, although as RSS advertising increases in popularity that is sure to change.
RSS advertising analytics are also becoming more sophisticated. Most of the vendors allow advertisers to not only track clickthrough rates but other types of engagement triggers as well, including sharing with friends, Digg(ing), adding to del.icio.us, Technorati submissions and subscriptions to a feed. CPM rate cards range from approximately $5 to $15 for B2C-focused feeds and $15 to $50 for B2B-focused feeds, depending on the degree of targeting. RSS feed advertising presents the best opportunity to advertisers that generate content themselves, including travel, automotive and entertainment sites.
As of April of this year, Apple's iPod has sold more than 100 million units worldwide, making it the most successful digital audio player in history. In addition to the success of the iPod, there are multiple MP3 players available to consumers and mobile devices now that phones are progressively more equipped to store digital content such as music and video. As a result, there is a marked increase in the amount of downloadable, serialized short-form content such as podcasts.
As with RSS feeds, media owners are eager to monetize their content through advertising, and there has been an explosion in the number of companies that have developed enabling technologies to insert advertising into podcasts. Additionally, in order to boost advertiser demand and increase efficiency, many of these companies also manage a network of podcasts. Some, such as Kiptronic, also position themselves as an enabling technology provider for advertising not just on podcasts, but on any downloadable media.
However, there are similar challenges to RSS feed advertising facing podcasting in order to grow the marketplace. As with RSS feeds, podcast marketing also faces a chicken and egg quandary, building both advertiser demand as well as available inventory at the same time. Furthermore, on disconnected media platforms such as iPods, PSP and mobile devices, it is a challenge to gather demographic data in order to target consumers. For the most part, demographic profiles are assumed based on content preferences. Some podcast networks such as Kiptronic and Podtrac also use survey data to get a sense of their audiences.
As with RSS advertising, one of the major advantages is that the media environment is still uncluttered. Additionally, an advertiser can reach an active, engaged audience because consumers have self-selected themselves as subscribers. Deploying ads on podcasts is becoming simpler as well, as companies like Fruitcast have begun to emulate the Google AdSense model of a pay-per-click, automated marketplace.
Advertising on mobile phones is perhaps one of the most complicated, least understood potential marketing platforms, at least in the United States. One of the factors contributing to its complexity is the number of players involved in deploying ads on mobile phones. Unlike web advertising, which operates on the principles of an open network (at least for now), mobile advertising is constrained by the carriers, who essentially hold the "keys to the kingdom." For the most part, the carriers own access to consumers, as well their demographic information. The dream of geo-relevant, targeted advertising on mobile platforms can only be unlocked by carriers agreeing to share that information, which is highly unlikely in the short-term given the privacy issues involved. However, despite some of these barriers there is strong incentive for carriers to offset content development and data delivery costs through advertising. Sprint, through its partnership with Enpocket, is the first carrier to offer on-deck advertising on its network.
Another factor contributing to the complexity relates to the creative demands presented by mobile advertising. Advertising on WAP requires maintaining a WAP presence that consumers can click to. As a result, the best opportunity for mobile advertising is to reinforce mobile goals (such as building traffic to a WAP site) and use mobile messages to complement other marketing channels. Targeting is primarily contextual, although the networks also offer daypart, device and carrier targeting and frequency caps.
Mobile advertising also faces the same challenges as the other categories mentioned: namely, reach and scale. To address these challenges, there are now numerous mobile networks that have sprung up to ease the complexity and offer advertisers the ability to deploy mobile ads across multiple devices, platforms and sites. Additionally, many of the traditional web ad networks and publishers are building their mobile offerings as the marketplace accelerates. The challenge for these networks is not related to pricing. Rather, the networks must prove the value proposition of mobile advertising.
24/7 Real Media
Google AdWords Mobile
Greystripe (mobile games)
Third Screen Media (owned by AOL)
Yahoo Mobile Ad Network
It's no secret that the television networks are losing young men (ages 18-34) as they spend more time online and playing games. This is one of the reasons in-game advertising is so attractive to brands trying to reach this elusive demographic. It's also one of the reasons Yankee Group estimates that the in-game advertising market will grow to $732 million by 2010.
In-game advertising offers an engaged, active audience. Additionally, for many games, such as racing and sports, advertising enhances the reality of the virtual world. Consumers expect advertising in these ecosystems because it mirrors real-world environments. As long as the advertising is relevant and natural, it seems to be welcomed by audiences and even seems to perform better than other ad forms. A recent study by Forrester found that recall rates for in-game ads ranged from 30-40 percent compared to an average of 10 percent for television advertising.
There is a wide range of creative inserted into gaming environments, including billboards, posters, video, audio and sometimes even avatars or characters. However, in the past, most of those product placements had to be hard-coded into the game itself and couldn't be changed. The in-game ad networks not only offer advertising opportunities across multiple games, but they also offer insertion technology that allows marketers to serve their ads dynamically and in real-time.