'Ad networks prosper as media planners seek parts of the internet they previously could not reach'
London, 6 December 2006: The UK market for Online Advertising Networks has doubled in size during 2006, from £60 million in 2005 to an estimated value of £120 million by the end of this year, according to E-consultancy.com.
Spending on ad networks during 2006 will amount to as much as 25% of overall online display advertising spend, which represents a significant increase on the19% figure for 2005, according to the research publisher’s 2007 Online Advertising Networks Buyer’s Guide.
E-consultancy.com analyst Linus Gregoriadis said: “Ad networks have achieved significant momentum over the last few months. Networks are becoming an increasingly important component of online display advertising and this fast rate of growth reflects that.
“2006 has been a very big year for ad networks. Whether for branding or direct response purposes, advertisers see networks as a great opportunity for accessing the long tail of the internet, giving greater reach and frequency.”
He added: “Our research comes in the same week that ZenithOptimedia forecast that the internet will account for a fifth of all UK advertising revenue by 2009. As part of this bigger picture, it clear that ad networks will figure even more prominently in the future not least because of the increased use of behavioural targeting which can make this kind of advertising much more effective.”
Ad networks represent groups of different websites on a collective basis, helping publishers to sell their advertising space while allowing media buyers to gain a presence on a large number of sites through a single sales point.
While the largest website publishers often have their own sales teams, there are thousands of internet sites which rely on networks to sell their advertising inventory on their behalf. Websites with existing sales teams also use networks to sell space which they have not been able to sell.
Some networks are geared more towards representing a limited number of premium websites on an exclusive basis, acting very much as an outsourced sales team, whilst others may represent hundreds or thousands of websites with a focus on broad reach.
E-consultancy’s £120 million market valuation figure means that spending on ad networks is equivalent to about 6% of total 2006 online ad expenditure which is estimated to have been around £2 billion in 2006 (including paid search and classified advertising as well as display advertising).
The rapid growth in spending on ad networks is a consequence of two trends, according to E-consultancy.com.
Chris Lake, E-consultancy.com’s editor, added: “Ad networks are continuing to benefit from investment in internet advertising as online media budgets at last start to come closer to reflecting high levels of online media consumption.
“Secondly, ad networks are no longer seen as a poor relation within the online display advertising sector. The influence of networks has gathered pace because of increased recognition that they give media buyers the chance to reach millions of users through a single sales point.”
A free Online Advertising Networks report is available to journalists. Please email for details.
Headline market trends in 2006
Ad networks develop as ‘long tail’ marketing vehicles.
Formation of industry body IASH welcomed as advertisers push for greater transparency.
Behavioural targeting increases ad networks’ effectiveness.
Squeeze on margins prompts trend towards consolidation.
Auction model set to drive efficiency in buying and selling.
About this report
Our 2007 Online Advertising Networks Buyer’s Guide contains an overview of this rapidly expanding marketplace with an analysis of market trends as well as profiles of 21 leading networks.
Which Online Advertising Networks are featured in the buyer’s guide?
24/7 Real Media, Accelerator, ad pepper, ad2-one, AdLINK, Adsmart, Advertising.com, Adviva, Blue Lithium, Burst Media, Casale Media, eType, Fuel, MediaBrokers, Media Run, Migration Marketing, Sky Media, TradeDoubler, Tribal Fusion, Unanimis, VC Media.
Download E-consultancy’s 2007 Online Advertising Networks Buyer’s Guide today.
Linus Gregoriadis, Analyst, E-consultancy
(e: t: 0207 681 4051 / 07956 564713)
Chris Lake, Editor, E-consultancy.com
(e: t: 0207 681 4052)
E-consultancy is an online publisher of best practice internet marketing reports, research and how-to guides.
E-consultancy, which was recently named Publisher of the Year at the 2006 AOP Awards, also publishes buyer’s guides and has a directory of 100,000+ third party internet marketing white papers.
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Subscribers pay from £149 per year to access the exclusive and highly practical content. E-consultancy has more than 100 events lined up for 2007, including roundtables and monthly Supplier Showcases, where six suppliers pitch to an audience of pre-qualified buyers in a Central London venue. E-consultancy also runs both in-house and public training courses.
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Published on: 12:00AM on 6th December 2006