Ad Networks: Middleman or Market Maker?

  |  August 5, 2011   |  Comments

Assessing the role of usability and ad networks in the future of digital marketing.

We all know that in digital marketing, the environment in which we buy, plan, optimize, and measure media is moving at a whirlwind speed. It's worth stopping to reflect on what we've learned in the first half of 2011 to ensure that our marketing dollar will get more of a bang for its buck in the second half of the year. Because I work at a company that provides cutting edge ad-serving technology and also uses its own technology to run one of the biggest media representation businesses in the world, we're in a position to give a 360-degree view on industry trends. Two recent key areas of focus we have identified are usability and the continuing role of the ad network in the marketplace.

Usability

Ad-serving technology should remain simple to use. The increasing adoption of smartphones, Internet TVs, iPads, tablets of all shapes and sizes, apps, and other technological novelties like 3D is forcing marketers to expand the scope of their digital campaigns and re-examine how and where they engage with consumers. Let's not forgot why TV advertising has been so successful and still is. It is simple. There are a handful of options to buy from and the measurement is standardized. But as we all know, digital is a whole different story. Advertising technology companies that simplify the process for their clients will come out on top at the end of this year.

Ad technology companies should focus on making ads closer and closer to word-of-mouth recommendations by partnering with top-notch companies that bring game-changing technologies. For example, companies like Media6Degrees are using social targeting for pre-roll video. Mindset Media is using psychographic targeting to help marketers reach users based on 21 personality traits that drive buyer behavior and brand choice across a broad range of consumer goods and services. That type of targeting enables publishers to deliver online users with the mindsets that matter to brands. There's a myriad of ways of getting to the right customer at the right time by using innovative targeting technologies. Consequently, ad tech companies need to continuously develop next-generation ad management software and new standards for user interface designs, without harming usability.

Media Networks

While technology companies must be aware of advertisers' needs, media networks must reassert themselves and be recognized as an integral part of online advertising today. While some critics may marginalize the ad network as a middleman, it continues to prove itself as a "market maker," i.e., an intermediary that buys and sells. For example, direct response advertisers still want to buy from ad networks with proprietary technology because of their ability to use their data in a way that offers more value than a demand-side platform. What's more, newcomers have created a complex landscape that is leaving marketers confused, as a recent Wall Street Journal article titled, "Pulling Out Weeds Online" noted.

In addition, some marketers unfairly group together ad networks without acknowledging that a handful possess a track record and expertise to keep the industry in a forward trajectory. Some ad networks possess optimization and targeting technology and offer sales and service. While agencies are gravitating toward real-time bidding (RTB) and demand-side platforms, ad networks still have their place.

As online usage and the number of sites and publishers continue to increase, the incentive for advertisers and agencies to move more of their ad spending online continues to grow. Online ad spending in the United States is expected to reach $31.3 billion in 2011, a 20.2 percent growth over 2010 numbers, according to eMarketer.

Ad networks are integral to matching the advertiser with the right publisher profile to target the most relevant and appropriate audiences. Analytics, advanced targeting, and optimizations make delivering audience demographics that more accurate and more valuable. And of course, ad networks will always be around to handle the sell side of the business for both large and small online publishers.

Let's see what the second half of 2011 brings. Don't blink or you might miss it.

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ABOUT THE AUTHOR

Nicolle Pangis

Nicolle Pangis, executive vice president, product management global media and technology, is responsible for the overall health and growth of 24/7 Real Media's global media and technology businesses. Ms. Pangis works directly with 24/7 Real Media's global team and partners to develop the overall product lines and strategic direction of the two divisions.

Ms. Pangis began her career at 24/7 Real Media in an affiliate relations role and later moved to account executive position. From 2001-2005, Ms. Pangis was employed by Cadent, Inc. as director of Northeastern operations, responsible for all new business in the Northeast region. Ms. Pangis returned to 24/7 Real Media in 2005, and worked briefly as an account executive, before being promoted to the role of director of strategic initiatives, North America, responsible for streamlining operations and workflow in the North American region.

Immediately prior to her current role, Ms. Pangis worked as the director of global deployment and business integration, responsible for all global projects and coordination of joint venture expansions, mainly in Asia. Ms. Pangis coordinated the opening of DTSI, a joint venture between 24/7 Real Media and Dentsu, one of the largest advertising agencies in Asia.

Ms. Pangis holds a Bachelor of Science in Communication from Boston University and an MBA in Strategic Management and Marketing from Rutgers Business School.

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