Outlook 2006: Ad Networks' Allure Extends Beyond DM to Branding

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Never have online ad networks been more important and in demand. And their growth is expected to continue this year as more marketers realize how ad networks can serve as a complement or alternative to portal and single-site online ad strategies.


The ad network model is ideal for brand and direct marketers in its ability to provide access to inventory across thousands of sites and millions of unique users that, while of acceptable quality, are typically too inefficient for a marketer to buy and manage individually. Collectively, however, they offer several efficiencies and represent extensive audience reach that rivals the offerings of the major portals.


According to comScore Networks' November 2005 Ad Focus rankings, the leading online ad networks are America Online's Advertising.com (134 million unique users monthly), ValueClick Media/Fastclick (111 million) and Tribal Fusion (81 million). Though there are dozens of others, few can match this level of scale, expertise, technology and composition of sites that top advertisers demand of their publisher partners.


Plenty of developments will keep ad networks one of the most effective online ad solutions for brand and direct marketers. Here are a few predictions for ad networks in 2006:


More transparency and site disclosure. Unlike the "blind" networks of a few years ago, today's top networks offer a degree of transparency for marketers to know on what sites their ads will appear. As brand advertisers continue to increase spending online, this will become even more evident, even for campaigns that have a DM objective.


Continued advancements in behavioral targeting. Only networks have the ability to scale the full potential of behavioral targeting, and ad network technologies will continue to serve the right ad to the right user at the right time more effectively based on the sites they have visited, terms they've used to search and items they have shopped for or purchased online.


More advances in optimization techniques. Optimization will become more predictive in nature, based on demonstrated user behavior, compared with more basic reactive placement testing. These advances in optimization technologies and inventory management will improve performance for everyone. Marketers will realize more performance at the optimal price. Publishers will improve their yield while earning fair market value for their inventory.


And consumers will benefit from receiving advertising more targeted to their interests.


Further separation between tiers. The larger ad networks, including portals that are getting involved in the network space, will pull away from the smaller and increasingly less relevant second-tier networks. There are two main reasons for this. First, more quality offers are being consolidated into fewer network marketplaces. Second, technology has advanced rapidly among the top networks to better manage these marketplaces in a way that creates more value for advertisers and publishers.


Brand marketers will embrace networks fully. More brand advertising dollars were spent on networks in 2005 than ever before. This trend will gain momentum as advertisers better understand how the behavioral targeting ability of networks can bring the precision of DM to brand campaigns on a massive scale.


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