Networks Are Not All Created Equal

by Tom Alexander, May 15, 2008, 1:30 PM

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The past 12 months have been filled with stories of networks involved in M&A. Some of the network buyouts over the past year include WPP procuring 24/7, Yahoo purchasing Blue Lithium, Media Initiatives Group picking up Dedicated Media, Microsoft acquiring aQuantive (Drive PM), et al -- more than $1 billion in combined valuation. As a result we've all heard about these networks. In fact, most of us have worked directly or indirectly with an advertising network in some capacity over the years. After all the publicity, most media planners, whether they are at an agency or direct client, still have not mastered the concept and uses of the ad network. There are new networks popping up every day, which only adds to the confusion.

In the past, networks were used for their direct response focus, and mostly ignored when it came to branding initiatives. There's a strict CPA goal the advertiser is trying to back out to, and cheap CPM inventory helps keep costs low in order to maximize ROI. Most agencies and advertisers have realized the benefit that networks provide for brand response campaigns. It's through their mass reach, branded sites, and often unique out-of-the-box placements and technologies, that branding and brand response campaigns have been able to be successful using networks.

The confusion comes from the four main types of publishers that get classified as ad networks, although they are all different and have their respective benefits. There are other types of networks, but these are the most common:

Site-Representation Network (a.k.a. Rep Firm) - These publishers exclusively represent Web sites and their inventory. They will always provide a full site list, and are idea for brand campaigns. They deliver high-quality traffic and do not focus on remnant ad space.

Examples: Gorilla Nation, Black Rock, WinStar

Advertising Networks - Typically make use of non-exclusive publishers. Inventory is typically remnant space from their collection of publishers. These used to be blind networks, but almost all of these networks will provide a full site list now (to their agency partners at the very least). These networks have combined with behavioral networks (Advertising.com/Tacoda/AOL) or developed their own behavioral targeting technologies (ValueClick). This type of publisher allows for the most flexibility in strategic media planning; some even have exclusive publisher relationships like a rep firm.

Examples: ValueClick, Tribal Fusion, Dedicated Media, Advertising.com

Technology Based Networks - Publishers in this category fall under retargeting, contextual, or some other technology based variation on targeting and optimization. These publishers are effective, but the relevance for contextual players, as well as scalability for the retargeting publishers, makes a significant difference when determining the best course for your media plan. The value-proposition for these publishers is based on the combined, un-duplicated reach they have across all of their network partners.

Example: Dotomi, Fetchback, ContextWeb, Kontera

Broker and Exchange Publishers - These are some of the new networks that are showing up constantly. Most use the exchange model to find cheap inventory with low risk, and pass themselves off as a blind network. Others take their advertisers and pass them off to other networks to run on remnant space. They work well for CPA campaigns where placement isn't as important as generating a conversion.

All four of these publishers have value as a network in one form or another, but it's important to evaluate your campaign objectives before choosing the type of network you are really looking for. You will be able to see the difference in your media plan if you utilize the right type of network.

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