Publishers and agencies often have a hate-hate relationship with advertising networks. But as much as ad sellers might hope, it doesn't look like networks are going away any time soon.
In fact, according to Adify study released today, ad network adoption is up 24% since May of 2008. At during "The Future of Ad Exchanges & Networks" panel at the OnMedia conference in New York on Tuesday, it became clear that ad networks are far from dead. And while they may not be called ad networks next year, the technology will continue to exist and thrive.
According to Adify, 69% of media planners and agencies now use online advertising networks as part of their digital ad buys. That's a 24% increase over the past 18 months.
Meanwhile, 56% of respondents’ budgets were more than $500,000 in 2008. 73% were over $500k in 2009. In 2009, 37.9% of those surveyed spend between $1-5 million per quarter on online advertising, 15.2% of respondents spend $5-20 million per quarter, and 5.9% spend more than $20 million per quarter on online advertising.
But that doesn't mean that ad networks can rest on their laurels and wait to rake in cash. According to the OnMedia panel, networks are in danger of becoming outdated.
It used to be that ad networks took in ad dollars and delivered ROI metrics, but as the online advertising ecosystem gets more complicated — and advertisers and publishers become more adept at navigating it — only those ad networks that adapt will survive.
According to Rajeev Goel, Ceo of PubMatic:
"Now we're seeing specialists coming in for each of these different constituents and optimizing for each constituent. All of these networks will have to choose which constituant they want to serve. I think most will choose the advertiser."
"The networks are a critical part of the ecosystem," says Drew Stein, the COO of IMO Entertainment. "Content is all over the place. You need to be able to find people and deliver ad impression no matter where they are. The ability to do that across multiple networks is exciting."
Amiad Solomon, the CEO of Peer39, thinks that for large large publishers, "whatever they can sell directly, they should." But the technology that has been popped up to sell remnant and non-premium advertising is not going anywhere.
Brian O'Kelley, CEO of AppNexus, puts it this way:
"I think it's short sighted to say that networks are going away. They'll be DSPs this year, they'll be another acronym next year. All these pieces of the ecosystem are just getting more sophisticated."
Technologists continue in their efforts to increase the traction and rates at which online inventory is sold. Whether they're called ad exchanges, networks or DSPs, in the end, it still comes back to that age old term: scale.
According to Scott Spencer, Google's Ad Exchange product manager:
"The promise of getting to brand advertising is starting to actually happen. If we can go to an agency and say 'replicate the superbowl audience one for one cheaper and easier,' than we'll be there."