• by Andrew Ettinger , December 4, 2009

Whether it is classic or new media, networks are integral to the advertising industry. Yet so many misnomers exist about what the term "network media" really means. A network is a collection of individuals grouped together in order to form a larger, interconnected system. Networks permeate every aspect of the media business, and even so-called local media relies on network affiliations.

For instance, local newspapers rely on Associated Press and UPI for national news. Rep firms can combine lots of small-town newspapers into a national advertising vehicle. The same formula plays out for radio, TV and even Web sites. As such, few media outlets are truly independent. The power of such associations brings advertisers to the table.

You can view networks either from the top down or bottom up. From the top, the national (or even global) reach defines the network. Whether they sell news, entertainment or information, their broad reach defines them. From the bottom-up perspective, all networks are inherently local. National GRPs are built one market, and one media vehicle, at a time.

Powerful national reach defines broadcast television. Rather than a singular reach, it instead comprises hundreds of individual local stations. ABC broadcasts on 445 stations that reach 98 percent of the United States, but abc owns and operates only ten of those stations. The remainder are merely affiliates. In fact, each station delivers a local rating independent of the national rating. Simply because Lost earns a 7.5 nationally does not mean it earned a 7.5 in Ithaca, n.y., or anywhere else for that matter. Different markets have different tastes and the national rating is simply a homogenous average. For this reason, Nielsen uses separate panels for national and local measurement.

Savvy national advertisers take advantage of this discrepancy, and can theoretically go heavy in specific markets without buying additional inventory. If they invest in programming that outperforms the national average in key DMAs, more local ratings are actually delivered. In fact, those markets are discounted relative to the national price.

A network rating does not ensure even-keeled impression delivery by market. Indeed, it does not even mean the rating is a national one, however much we infer this to be true. Networks are only as good as their components.

Ads on network radio are especially susceptible to uneven market delivery. The very nature of the product lends itself more favorably to smaller markets. Radio nets exchange programming services for advertising time on stations. Since small-market stations have less money to invest in operations, they are far keener to sign up as affiliates than large-market, cash-rich stations. If a network strings together enough small-market stations, the combined rating will be large but not actually a national number. The catch, since the major markets are underrepresented (versus the percentage of population they represent), is that the rating is not truly national. Smart buyers examine network radio's ratings from the bottom up.

Some revile online ad networks for their lack of transparency. Brand marketers want to know their ads will not appear alongside salacious or otherwise inappropriate content. But transparency is also important for another reason entirely. A network can easily expand its reach by adding affiliates. Simply put, more sites equal more impressions. Increasing traffic to existing Web sites makes it much more difficult to grow. Organic growth means the Web sites develop loyal audiences by providing fresh, compelling content. In my experience, advertisers prefer the latter even if the out-of-pocket is slightly more.

Online nets are cheap and, like all Web media, can be tracked. It is easy to determine which markets deliver clicks. Unfortunately, measuring average time spent on the network level is almost impossible to accurately report. But advertisers who can accept these flaws can gain huge reach at low cost. If performance trumps transparency, then online networks present a viable option.

This article would not be complete without referencing the 1976 movie Network. The film drives home the power of network broadcasting. Networks are amazing tools that communicate complex ideas in simple, powerful ways. However all networks are not created equal. So many buyers don't really understand this fact. In fact, I am mad as hell and I am not going to take it anymore!