Network model takes hold online to gather audience

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Advertising networks have had their place in media's ecosystem for cable, for radio and in print. Online, the story was the same until something happened: networked audiences.

Online ad networks were the last resort for online publishers to fill inventory; and in the ad community, they acted only as remnant providers. They worked inventory nobody else could sell. Networks focused on direct response, selling to the marketers who wanted conversion, not environment or brand-building. Due to the price points and volume, it's a complex business to manage. Networks built technology to aggregate and scale inventory, optimize the best placements and build audience diversity to insure campaign results. The innovation in lead driving from ad networks has been amazing, from click or conversion optimizers to ad exchanges to retargeting.

Soon brand marketers realized that audiences spent more time engaged with online sites than with print, radio or television. Agencies who were grappling with the fragmentation of traditional media, were faced with explosive growth in online media properties.

With more than 20,000 ad-supported Web sites, a media planner's task is daunting. They'd funnel the majority of their budgets to the portals, because they were the Internet's first aggregators of audience. With a few orders you'd reach 90 percent of your audience and receive customized brand solutions. The challenge was the reach frequency distribution. Eighty percent of the impressions would get served versus 20 percent of the audience. This distribution is of less concern when focusing on response than when you're building a brand.

Planners can't put 80 percent of their dollars on a few properties and expect efficiency for their client. Agencies lack the resources to buy 80 to 100 sites to satisfy brand objectives. So networks like JumpStart, Travel Ad Network, Tacoda or NetShelter focus on the needs of the brand. They place premium inventory across diverse sites to address the reach/frequency challenge, new metrics that speak to engagement, brand lift and driving the message. They reach high-value audiences through context, behavior or retargeting to deliver pre-qualified audiences.

Agencies are shifing dollars from TV and traditional media to reach their target audiences efficiently at volumes not seen online. We see Yahoo, Microsoft and AOL creating large media networks to satisfy advertiser demand. Audience aggregation allows brand advertisers to reach their prospects and customers in numbers that rival the broadcast networks, with the interactivity of the Internet. n

Larry Allen is SVP of marketing and business development for behavioral targeting advertising network TACODA Inc. He can be reached at lallen@tacoda.com.

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