Networks, Networks Everywhere

A wonderful thing about the holidays, the days and weeks leading up to them are like a rat race.  Working to get more done than possible with less time reasonable to do it with.  But when you get to the finish line, there is literally nobody to around to get any more work done with.  So I get to catch up on the reading, the blogging, the planning and all of the fun stuff that I have been putting off for the last quarter or so.


The first one that caught my eye was Jim Meskauskas’ article in iMediaConnection: Networks, Networks Everywhere.  Jim is colorful writer and I always enjoy reading his articles.  I wish I had not missed this one when it came out last month, as it had some great fodder for a conversation that I shared through blog posts with Dave Morgan as well as some other posts that I made on this blog.


Jim characterized the boom of networks over the past couple of years in a light as a love of something that will likely break.  “You can have your ads run in some great properties and, more importantly, reach great audiences. And it won’t cost you too much.”  Networks have always been known for the cheaper route to some potentially solid inventory.  More recently (as in years), some networks have turned on some technological advances like targeting (yes, BT) and content-specific selection that make them even more useful. 


You do have to weed through networks inventory to make sure that you are getting the goods.  As Jim said, “The web’s worst kept secret is that even the most popular sites have more inventory than they can sell… and so it either runs as bonus, a make good or ends up in a network.”  They keep the best valued positions for themselves and run the ‘remnant’ through networks.  But is that necessarily true?  Some networks like Tacoda or have exclusivity with a site and may get certain premium positions. 


Jim is also not shy about the fact that “enthusiasm to spend online doesn’t mean that all places become viable vehicles for advertising. Just how many ad networks can the marketplace bear?”  So therein lies the problem that I discussed in my post: Ad Networks and Advertisers.  How does an advertiser know which networks to go with.  At what points do they start just advertising on networks and stop advertising on sites altogether?  Okay, it’s the polar extreme but is it a trend?


Jim writes: “If as an advertiser I’m making a reach play, I risk burning out an audience with too much frequency even if the buy made was with multiple vendors. If as an advertiser I’m making a DR play, I risk wasting multiple exposures against too many disinterested members of the audience.”


Ad Networks and Advertisers I also talk about this problem.  Getting multiple exposure from different ad networks will throw off your balance of exposure.  Not all networks will let you select the publishers, positions, content.  Many won’t even tell you all the sites in the network.  So does network advertising have the potential of elevating above the board from remnant?  Will the value of branding ever extend beyond just a few networks even through more an more are coming online?  Jim asks what will the market bear?


Dave Morgan’s Ad Network Resurgence in MediaPost talked about the boom of ad networks over the last couple of years.  With his perspective and experience over the years he was very positive and saw the increase as a good thing for the industry.  Like Jim, I raised a concern about pressure on the market.


I asked Dave, “As to the idea that there will be more and more networks popping up, where does it end Dave? How do you keep differentiating so that a buyer knows the best place to allocate funds? Does an advertiser have to pick from Tacoda or for behavioral targeting? Or buy from both plus others to cover all bases as more pop up? The more networks you add the more diluted it becomes right? Don’t you think that a consolidation becomes more necessary? … I only ask because it seems like the more networks you have the harder it is for an advertiser to decide where to allocate funding.”


Dave didn’t respond to my inquiry on his blog, although he and Tom Hespos had some fun in follow-on posts.  For me, I am just trying to get to the bottom of the same questions as Jim.


In an market environment when you have too much pressure in one area, you have a reactive pressure in another area.  A ‘snap’ if you will to balance out the pressure.  It can be slow or fast but it happens.  In the case of the network boom, it is likely that a tipping point is approaching.  But what will that represent?  A consolidation?  A devaluation of inventory?  Will advertisers begin to withdraw from networks because of the overlap of audience?  Will publishers begin to apply pressure on the networks and drive up the CPM they demand for their inventory because of the competition in the space?  Something is going to force the over-abundance of networks back down when that point is reached.  Who will be left standing?  Many of us can guess on a few of them.  And even I am not bold enough to point fingers.  But the tipping point is definitely coming even if some of the most accomplished and experienced people in the space don’t want to talk about it.

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