Editor's note: One of the interesting new developments in the world of ad networks is the rise of vertical-specialty networks for industries like automotive, hi-tech, athletic enthusiasts, travel and more. Over the coming weeks we'll check in with the heads of different vertical ad networks to see how and why specialty networks create value for advertisers.
Vertical ad networks have slid in under the radar because they are more of an evolution in online advertising than a revolution. But while the revolutions make the headlines, evolutions are more likely to make history. Vertical networks may not be as sexy as the next big, flash-in-the-pan targeting technology or automated marketplace, but they're an overlooked branch in the family tree of internet business models, and it's a branch that has grown steadily over the years.
The fact that this model has grown without much venture capital behind it points to the fact that the business principles are sound and that these companies can be both in the black and under the radar.
A central thread across our industry is that media is fragmenting. Empowered consumers want their media the way they want it. This levels the playing field for niche publishers serving focused but highly engaged audiences. But it handicaps the advertiser who wants to include this highly engaged niche user in their reach. The advertiser now has to find that user on 10,000 websites rather than one channel.
Vertical ad networks provide value by organizing that audience
This splintering of the media landscape (or niche-casting as I like to call it) is the essential engine driving the vertical network forward. Television is going from three channels to 300; radio has gone from 30 FM stations on your dial to 198-plus on your Sirius. The internet is no different. As long as the majority of online experiences involve a search engine at some point, the web will never be an ABC-versus-NBC-versus-CBS environment.
For example, in the travel industry, vertical ad networks reach the fanatics or the enthusiasts-- the talkers. These are the folks who aren't content to stop at Expedia, Travelocity and Orbitz and call it a day. They're looking for a richer vacation experience, a better hotel room, a cheaper deal or an off-the-beaten-path holiday. They know that a site like EuropeForVisitors.com has more information on Venice, for example, than a generalist website. Lackadaisical travel planners may never stumble upon EuropeForVisitors.com, but the enthusiasts, the talkers and the brand advocates will. We feel they're a more valuable audience for travel advertisers.
Used effectively, a vertical network should not inhibit the reach of a campaign. General branding campaigns should do as well on the horizontal network as on a vertical network. In this case, a vertical network becomes a part of a media plan, alongside the horizontal network. Networks have always served the long tail of an ad campaign. And we see that vertical ad networks can be used in the same way.
However, if the advertiser is seeking deeply engaged explorers who want the best site for them (not just the biggest site), then the long tail should wag the dog.
Engagement campaigns or advertisers seeking to generate user-generated content would do well to capture the more exploratory and adventurous readers associated with vertical ad networks.
How it works
Vertical ad networks can offer deeper and more effective targeting than general networks. For example, the way you use IP targeting or content targeting to reach a car buyer or travel buyer can be totally separate.
Let's say an airline wants to target a traveler in Seattle who is reading about Miami because the airline just opened this route. We've built out the expertise to target this travel planner effectively. Individual sites probably wouldn't have the reach to get a critical mass of consumers. General networks might have the reach, but not the tools or experience to reach them. In this situation, the vertical network is like Goldilocks and the Three Bears--"Not too big; not too little; its just right"
There are additional targeting techniques, technologies and expertise that vertical networks can deploy that other general networks can't. For us, that's sub-verticals like Cruises, Vacations, Luxury Travel, Resorts and route targeting for airlines and vacations, rather than just the travel channel on a bigger network. We can use these targets to help travel (and non-travel) advertisers hit the mark with their campaigns.
The traditional online media outlets like mega-sites, portals & general networks are enough to please most clients. In the future, we think the vertical network will be an increasing important part of the online marketing mix. It's the best way to reach the fanatics and make the long tail wag the dog.
Cree Lawson is Travel Ad Network's CEO. Read full bio.