Who Loves Ad Networks?

Not a match made in heaven.

Ad networks serve as brokers between Website publishers and advertisers, and the benefits for both can be significant.

ThinkEquity listed four ways that ad networks create value:

* Creating scale and aggregation opportunities for marketers and, in the process, providing smaller publishers with access to advertiser demand for broad reach
* Providing marketers with a cost-effective broad-reach alternative to the portals and other large Internet media sites
* Creating order in the marketplace for ad inventory by categorizing and segmenting inventory and audiences
* In the case of performance-based networks, minimizing risk for advertisers by guaranteeing results and ROI through the use of click-per-action (CPA) pricing or click-per-thousand (CPM) pricing with CPA targets

For the most part, advertisers are satisfied with the relationship.

A Collective Media study found that a large majority of advertisers used ad networks in 2008, and even more have plans to do so in 2009.

The reasons varied.

In 2008 (when only one response to the question was allowed), efficiency was the top answer, followed closely by targeting and reach. In 2009, when the survey allowed for multiple answers, most still said efficiency, followed by reach and targeting.

Nearly one-quarter of advertisers plan to spend between 16% and 30% of their budget on ad networks in 2009.

About one-third of advertisers expect to spend 6% to 15% of their budgets with ad networks, and 21% said 1% to 5%.

Tellingly, only 10% of advertisers have no plans to include ad networks in their budgets in 2009.

Ad networks are facing challenges with the online space from a number of different directions, however, including from advertisers and agencies.

Respondents reported limiting their use of—or not using—ad networks due to lack of transparency as to what sites are used (58%), lack of control as to the position of their ads (46%), questions of editorial quality (42%) and audience duplication (36%).

For more information at http://www.emarketer.com