AudienceScience Rejiggers Business Model, Closes Ad Network Biz

by , Nov 29, 2012, 6:21 PM
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AudienceScience shut down its ad network, laid off 33 employees and reassigned others to positions focused on the company's advertising platform business to better support brands.

Jeff Pullen, AudienceScience CEO, told MediaPost that trying to run an ad network while working to build out a platform stifles innovation and creates conflicts in resources.

After several years, the ad network business became less significant to AudienceScience's overall strategy. "We felt it was time to make a definitive statement on our growth opportunity," he said. "Being out of the ad network business allows us to squarely align ourselves with the goals of advertisers."

Pullen said the complexities of the digital marketing supply chain through  margins, fees, unknown margins and other costs made it difficult to support advertisers. The focus now points to brands. The company will not buy inventory from various locations, from publishers and exchanges, and resell the inventory to agencies on behalf of their clients on an IO basis.

AudienceScience will work directly with advertisers, execute campaigns on behalf of those advertisers, and make inventory purchases, Pullen explains. The fee becomes a technology, rather than a services fee. It's a different model than an ad network, he said.

"The decision to move away from an ad network is a logical and consistent evolution of the way the business has grown in the past couple of years," he said. "The advertisers need more efficient processes that give them insight into the way they spend money, especially if more money is to find its way online."

The strategy also expands into integrating social data and targeting. Earlier this month, AudienceScience introduced social targeting through its Gateway platform. Advertisers can tap social targeting data and ad inventory to support campaigns. The social features allows advertisers to create custom segments from a variety of social sources, including their own assets, as well as AudienceScience's data and third-party data and content partners.

The Gateway's first-party data technology creates custom audiences from their properties, such as Facebook "likes," posts to community pages and ratings and reviews. Brands can customize segments using AudienceScience's social data and segments. The strategy starts to combine inventory on major social media sites through real-time bidding. It also supports private exchange technology enabling real-time buys with specific publisher partners, and social channels within the premium publisher network.

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