Partner or Perish

by Scott Howe, Jun 24, 2005, 3:00 PM

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It's hard to make sense of today's crowded targeting landscape. With nearly 100 self-proclaimed ad networks and targeting providers to choose from, how can an advertiser possibly choose the right solution without investing months in due diligence?

Most networks offer fundamentally different targeting services: many group placements into interest categories (e.g. sports, weather, etc.), Google facilitates contextually relevant placements on specific sites, AlmondNet utilizes past search behavior, Revenue Science offers publisher surfing profiles, Yahoo! has strong geotargeting capabilities fueled by their registration information, Claria targets off information passed back through their desktop application, and Advertising.com uses action tags.

Surprisingly, all have a place on an advertiser's media plans. Consider a major automotive manufacturer. It may want to purchase media on broad, relevant categories to build brand, buy more contextually relevant placements to create interest, utilize past searches to lure consumers to their site and employ action tags to launch more sophisticated re-messaging campaigns aimed at recent site visitors. Rather than choose a single targeting solution, smart marketers recognize that their needs can only be served by utilizing a wider combination of tactics and partners.

Does this mean that the market can support hundreds of networks? Not likely.

The challenges faced by many new entrants are formidable. Strong targeting providers will continue to enhance their selection and ease-of-implementation - features which require continuous technology innovation. Moreover, targeting is challenging for many advertisers, so the best targeting providers will build strong client service teams in order to provide advertisers with actionable insights and recommendations. And as new entrants join the field, the increased competition mandates that targeting providers minimize waste and utilize sophisticated analysis to ensure that every ad is utilized effectively. Scale, service, and analytics may prove to be differentiators that separate niche technologies from enduring companies.

Are conditions favorable for some industry consolidation? Undoubtedly. Increasingly, smart marketers will consider scale, service, and analytics in choosing their targeting providers, so that they have enduring partners with which to innovate and improve over time. Networks with a strong sales and service orientation will need to ensure their strengths are complemented by analytics and technology. Niche technology providers must find distribution and scale to fund ongoing development costs.

Those that cannot partner to effectively provide scale, service, and analytics will bleed share to competitors and ultimately perish.

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