Specific Media’s <a href=”http://www.clickz.com/clickz/news/2082852/network-specific-media-buys-myspace” target=”blank”>purchase of MySpace</a> this week is indicative of a trend, as ad networks increasingly looking to diversify the models on which they originally built their businesses.
The rise of ad exchanges and social media platforms continues to challenge the ongoing viability of networks, and some are now investing in owning and operating their own properties as a way to offer increased value to advertisers beyond just bundled inventory.
“It is a trend… this is an indication of one path networks might choose to take,” Dave Marsey, group media director at Digitas, told ClickZ. “There are a number of factors forcing ad networks to reconsider their long-term value propositions,” he continued, specifically citing the growth of exchange-traded inventory, the already crowded network space, and many advertisers’ increasing preference for social media-based advertising and marketing activity.
“Networks don’t control the context or content. The model is still very much about pushing impressions and talking at users, versus buying owned and operated where they can reach that audience in context,” Marsey said, adding that “the ability to branch out gives them a new opportunity.”
Having formally announced its MySpace purchase earlier this week, Specific Media plans to reveal its intentions for the property by September, as well as a new direction to be guided by personal investor Justin Timberlake. Having built its business primarily as a behavioral display ad network, Specific has actively pursued new areas such as video, and purchased video ad network BBE last year to help kick start that effort.
Specific Media is only one of a growing number of ad network companies to stake their fortunes on media ownership and custom advertiser solutions. Among the prominent examples are Federated Media Publishing and Glam Media.
Meanwhile independent media and ad network Say Media appears to have ambitious content plans of its own, evidenced by its acquisition of animal-oriented social networks Dogster and Catster in April, and the subsequent launch of women’s interest site xoJane.com.
Speaking with ClickZ last week, Michael Sippey, VP of artist development for the firm said it has “a bunch more” properties in the pipeline and is expanding its Media Lab division in order to help drive those efforts.
“This is about adding more capabilities to build our own properties as well as working with properties we acquire down the line,” Sippey said, suggesting an emphasis on providing brands with more integrated offerings. “We can do some really interesting and compelling things for brands; custom content programs that give brands a range of ways to connect with consumers.”
As far as MySpace is concerned, Specific Media has admitted challenges in nursing the ailing product back to health, but Marsey suggested there remains an opportunity for the company to make good use of it. “Pre-acquisition we had pretty much walked away from MySpace. They just didn’t have a real sense of what their value proposition was or what they were trying to be,” he said, but suggested Specific could use the product to gain valuable insights into the types of content audiences engage with and share, and use those experiences to help inform wider activity and buys across the rest of its network.
Marsey also acknowledged that audience data was probably one reason for the purchase, as far as Specific is concerned, but described it as an “added benefit” as opposed to a primary motive.