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Ad Networks and Exchanges to Explain Choices Open to Marketers

Posted by Mort Greenberg on May 1, 2008

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Published: April 14, 2008

What’s a network? Isn’t that a TV thing?
Not in this case. An ad network is a group of sites that a portal or a media company can sell collectively to an advertiser. But just like TV networks, the point of selling as part of a group is to increase scale and reach in an ever-fragmenting web.

Is an ad server the same thing as an ad network?
No; networks sell ads while servers, such as DoubleClick and Atlas, generally don’t. Advertisers and agencies use ad-serving technologies to simplify the ad-reporting process. Publishers use ad-serving companies to help decide which ad to show in each instance and help manage their inventory.

What do networks sell?
Some networks sell text ads, some traffic in display and others sell things like video ads and ads in video (not necessarily the same thing). Networks also differentiate themselves by how they target. You’ve got performance networks that use a variety of optimization tools to try to increase the value of often low-priced inventory; behavioral-targeting networks that use a person’s past web-surfing habits to target them with relevant ads; contextual networks that try to match an ad’s subject to that of the page on which it appears; video and widget networks that sell in, well, videos and widgets; and rep firms, which are more like an outsourced sales staff for smaller but often high-quality sites.

Who are the biggest ad networks?
AOL’s Platform A reached 91% of the online audience with 166.8 million unique visitors in January 2008, according to ComScore. It was followed by Yahoo’s network (155.8 million uniques), which includes recent acquisition Blue Lithium; the Google Networks (143.2 million uniques); and Specific Media (142.3 million uniques). And there are tons of vertical networks that specialize in certain types of audiences or sites.

Wow, that sounds confusing. How do I buy inventory from a network?
Start by figuring out what you want: general reach or a specific audience? Is your end goal action-based, like clicks or newsletter sign-ups? Or is it the more general brand-building that a site-specific rich-media network could provide? If you want clicks from a broad 18-49 target, any one of the portals or major ad networks can help by using text, display or cost-per-click-based video ads. Are you seeking a more granular audience? Perhaps a vertical ad network can help.

What’s a vertical network?
Vertical networks allow advertisers to target more specific demographics and communities: for example, male gamers aged 18-24 through or fashion-loving women 18-34 on Glam Media. Existing media companies also are getting into vertical networks to extend their online reach, including Martha Stewart Living Omnimedia’s Martha’s Circle or Nickelodeon’s ParentsConnect, to name a few.

If I buy a network, do I know where my ad will appear?
It depends on the network. Some networks operate blind, meaning an advertiser doesn’t know where its ads will appear. Other networks allow you to cherry-pick specific sites. (Or, as the case may be, avoid certain sites.)

I’m a publisher. What’s in it for me to get involved with a network?
Some networks will buy a publisher’s inventory and then use their targeting tools to sell it at a higher price. This is called an arbitrage model. Other networks work on a revenue-sharing basis, where they will sell your inventory for a cut of the deal. To gain contracts with lucrative publishers, many networks will guarantee a minimum amount of revenue through the agreement.

I keep hearing about ad exchanges. Explain.
The idea is borrowed from Wall Street, where buyers and sellers all trade in a central market in real time. Networks put inventory into the exchange to be bought, most often by another seller, which needs the impressions to fulfill an advertiser request. Buyers can gain access to a pool of online-ad inventory that may not have been available through any one vendor.


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