The Ecology of Ad Networks - Part I

I attended OMMA’s AdNets conference in NY on November 6th. The conference invited leading so-called horizontal and vertical ad networks as well as a host of luminaries from the agency and client marketing side. Here are a few notes and observations from the first half of the day:

Part 1: Morning Sessions

Samir Arora, CEO of Glam Media, spoke to the “media paradox of the Internet” to explain the rationale behind the growth of vertical media and advertising networks. Arora indicated that the Internet is the only media where there is no control over distribution. Even a major online portal such as Yahoo – with 74% reach among Web users – commands only 7% of overall Internet usage. By contrast, if you look at the top three TV networks, you’ll find they command a much larger percentage of usage.

Arora also argued that even if the Internet is not the most authoritative medium it is the most influential one, particularly for younger adults who spend more time online than watching TV. Reaching those key audience segments across the fragmented online media space, creates the need for aggregators such as vertical networks to combine audience reach in targeted categories.

Havas’ Digital Chief, Don Epperson, outlined a new “virtual brand network” that would allow the agency to plan, buy, manage and even reallocate online inventory. The virtual brand network will be powered by its Artemis system, a database management and reporting system that claims to have profiled more than a third of the world’s online user population. Epperson stressed that the system is still formative and that ‘we still have a lot to learn, but envisioned that it might evolve into a “futures” marketplace for upfront buys.

The next panel billed as a “smackdown” between horizontal and vertical ad networks suggested that media buysers are not necessarily choosing one at the expense of the other. Jocyelyn Griffing from Icon International said that higher-end marketers want more targeted busy in vertical categories while those looking for “tonnage” in impressions seek horizontal networks. In recessionary times, the panel agreed that marketers are increasingly turning to performance-related buys that focus on accountability and return on investment. Vertical networks such as Good Health Advertising and the Travel Ad Network emphasized their differences and value adds in contrast to traditional (horizontal) ad networks. For example, both vertical networks focused on the fact that because they are managing far few sites, they are able to achieve a level of custom integration and reach that was previously possible on large portals and publishers.

Next: Part Two: Afternoon Session and Commentary on the Major Themes

Links:

OMMA AdNet