Interactive Seven 2009 Supplement - Marketing Week

MWIB_260209_p045 19/2/09 17:55 Page 45
INTERACTIVE AD NETWORKS
Under the spotlight
Online ad networks may have fallen short of expectations, but they
continue to thrive. However, fierce competition and strict budgets
mean they must now be more accountable than ever. By Steve Hemsley
This time last year, digital marketing experts
were predicting great things for online ad
networks. Research firm E-consultancy
reported that media spend through these
vehicles had doubled between 2006 and 2007 from
£120m to £240m.
This prompted it to forecast 60% growth for
last year to an estimated £385m. However, following
a strong first half, revenues dipped significantly
in the final few months. E-consultancy has yet to
confirm the final figures, but growth was probably
nearer 30%.
Although this remains a relatively healthy sector
– the IAB claims ad networks take about 40%
of online ad spend – this has become a fiercely
competitive marketplace. There are about 80 suppliers
offering to connect advertisers with websites,
blogs, RSS feeds and emails on which to promote
their wares. In fact, the large media owners have
become used to asking these networks to sell their
remaining inventory.
Thanks to the evolution of behavioural targeting
technology, the best networks have started to
differentiate themselves. It means advertisers can
target specific audiences more effectively, and marketers
can partner with networks that really understand
their specific industry sector.
E-consultancy head of research Linus Gregoriadis
expects some ad networks to “go under” this
year and to see plenty of consolidation. The network
Adrevenue went into administration in
December after it failed to find a buyer. “Online is
still very measurable and is more protected than
other media because it is easier to track. But things
are changing,” says Gregoriadis. “Ad networks will
only survive if they have strong media properties.”
With marketers being asked to question every
penny they spend, the old negative arguments
around using ad networks are raising their head
again. Many advertisers have questioned the real
value of unsold inventory. Others still fear their
brand will appear on illegal or dubious sites, especially
through “blind networks”, where marketers
lose control over where their ads will run. The ad
networks are also worried they will lose revenue
to the paid search companies as advertisers chase
responses to boost short-term sales.
“In these difficult times, advertisers need tangible
returns. With paid search and the clever use
of key words, people will come to the most relevant
pages on a website, so they are more likely to buy
something,” says Rob Pierre, managing director of
paid search company Jellyfish. “I would have
Apprehensive: Some advertisers still fear their
ads might appear alongside dubious content
thought more ad networks would have moved to a
cost-per-acquisition model.”
Not surprisingly, the ad networks are fighting
back. Research by independent ad network Specific
Media suggests that paid and organic searches and
clicks are influenced by online display ads. A 12-
month study of its clients, using data gathered from
the respected comScore Ad Effectiveness system,
claims effective advertising can lift search queries
by as much as 155%. The greatest impact was in
travel and tourism, where exposure to display ads
boosted queries by 274%. There was also significant
growth in healthcare (260%), personal finance
(206%), automotive (144%) and retail (69%).
“Ad networks provide technology to discover
surfers’ intentions and maintain relationships with
websites on which ads can be served,” says Specific
Media international managing director Colin
Petrie-Norris. “We believe display advertising
drives search, while in the past year the profile of
the behavioural targeting used by ad networks has
helped clients increase their yield and get better
consumer insight.”
Increased accountability
Ad networks insist they make a marketer’s spend
more accountable, especially if the network really
understands the client’s industry. The network can
tell the advertiser, using behavioural targeting,
which websites a potential lead or influential decision-maker
would visit, and which content they
would read.
It is always important to ask any network operator
why and how its data will deliver the results
you want, and to find out if it has any case studies
specific to your industry or business. Marketers
should always share information about their objectives.
An ad network can make the mistake of thinking
a client has just one objective, when it has
different aims for its various brands and products.
The digital media agency BLM Quantum, part
of Havas/Arena BLM, even has a clients’ charter
to ensure it gets the best service from ad networks.
“We monitor everything when investing clients’
money,” says managing director Dan Clays. “We ask
questions about frequency, what content filters are
in place so ads do not appear next to inappropriate
content and, if we are using multiple networks, how
to avoid any duplication.”
When deciding how many networks to work
with, Clays recommends choosing companies with
effective optimisation technology to manage a campaign
effectively. This would mean that under- performing
websites are removed, for example.
Marketers should also demand transparent reporting
on where exactly their ads have appeared.
The Internet Advertising Sales House (IASH)
was set up in 2005 by ad network owners to encourage
best practice, and it is keen to show it has teeth.
It’s a year since it introduced random audits for
members and, in July, it suspended an unnamed
member for breaching its code of practice, which
includes a ban on adverts appearing on “barred
content” websites, such as those featuring indecent
or hate content.
The 16 members to pass the audit were Ad2One,
ad pepper media, Adconion UK, Addvantage Media,
Advertising.com, Consilium Media, dgmDisplay,
DrivePM UK, eType, GMW Media, Glam Media UK,
Specific Media UK, Tacoda UK, Unanimis Consulting,
ValueClick Media UK and Yahoo! Network.
IASH’s interim chairman is Richard Sharp,
managing director of ValueClick Media. He accepts
that marketers can still feel uneasy about ad networks
because of fears about where ads will appear,
but insists the IASH code is helping to reassure
them. He also maintains there will be more costper-acquisition
measurement in 2009.
One emerging area which is helping brands
with international and regional campaigns is
the mobile ad networks market. The technology
exists to track responses to specific campaigns
by measuring click-through rates and detailed
analytics of the pages browsed. However, the high
cost of mobile internet in the UK and the domination
of banner ads, rather than more creative
options, is holding the market back, says KF Lai,
chief executive officer of Buzzcity, which runs a
mobile ad network.
Despite the uncertainty, it is likely the growth
in ad networks will still outstrip the overall
digital display advertising market in 2009, fuelled
by the emergence of more web publisherdriven
networks and better regulation to ease
advertisers’ fears.
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