Ad network clutter
When you cover ad networks, it's easy to miss the forest through the trees. Writ large, the sector is probably best defined as ad networks, but within that space is a range of business models. There are some obvious differences like horizontal ad networks versus verticals. But that only scratches the surface. A recent Wall Street Journal article highlighted the growing confusion that has shaped the ad network space as media buyers struggle to tell one network from the next.
According to Robert Tas, CEO of Sportgenic, the plethora of business models that define the ad network space is so pronounced as to shatter the all-encompassing moniker of ad network.
"I have a lot of respect for Tim [Vanderhook] and Specific, but at the end of the day, we're just two totally different business models," Tas explains. "Our challenge is finding things that provide a value to all sides. When you go to one of our properties, you go there because you want to. These are communities that are part of who you are. We spend a lot of time doing the heavy lifting to create a high-end brand experience."
Sportgenic's tailored approach is a far cry from Specific's 100 billion monthly transactions reach play. Yet, both get lumped into the generic category of ad networks.
But while each business model certainly has its place, each must share the same turf to varying degrees. For a Sportgenic client, the goal may be to engage with a relatively small community of users. A typical Specific Media client may be looking to do just the opposite -- namely reach as many people as they can as often as they can without much concern for what people think.
The trouble comes about when users like me start asking questions. It only took me a few phone calls to figure out why I was being bombarded when I thought I was supposed to be getting laser-targeted messaging. I have a job and a rolodex that helps me figure out that a brand like Netflix simply isn't interested in having a conversation with me, whereas as a brand like Saab may want to fully engage with me as a member of the FitFiend.com community (the former serving as an example of a campaign executed on Specific, the latter one that has played on Sportgenic). But for most users, all of those attempts at messaging are simply filed away under nefarious terms like "tracking."
According to a recent report from eMarketer, 71 percent of internet users are aware that advertisers are using their online behavior to tailor messaging to them, but only 41 percent of users report being familiar with the term "behavioral targeting." Presumably, only a fraction of internet users actually understand what goes into behavioral targeting. But that didn't stop more than half of those surveyed -- 57 percent to be exact -- from stating that they were "uncomfortable" with the practice.
So what does all this mean? If you're an advertiser, it means that a cluttered media environment may be a lot worse than you thought. Consider the typical user who bounces from a handful of big-name sites to the smaller publishers that have to rely on ad networks. If that user finds himself as a regular visitor to a site that Netflix has deemed a dumping ground, he's going to get pummeled -- and maybe that's a good thing (for Netflix).
But when he goes to a smaller site sponsored by an advertiser that's interested in participating in his community, it's not clear that he'll easily be able to switch gears and have a conversation with a brand. His guard is up, and he's probably a lot less likely to want to hear a message tailored to him because he just came from a place that bombarded him with messages that weren't for him.
Unfortunately, there's no easy solution here. It seems certain that the internet can offer the reach play, if only Vanderhook et al manage to attract the big-name advertisers. But the internet is also the best medium in the history of media for hyper-engagement in the demographic niches users really define themselves by.
The question, it seems, is whether advertisers can have both without driving users away from sponsored content altogether. Or, put another way, can you yell irrelevant messages at me one minute and then sit down to talk politely about a topic of my choosing the next?
Michael Estrin is associate editor at iMediaConnection.