Advertisers, Agencies Plan Shift From General To Targeted Ad Networks, Remain Dubious About DSPs

Spending on general, broad-based ad networks -- which currently are the dominant source among advertisers and agencies that buy online advertising inventory though networks -- will decline over the next 12 months as Madison Avenue shifts its focus toward more targeted options based on user behavior or social networks, according to a new study being released this week by the Center for Media Research.

The study, "Ad Networks: Pros & Cons Of Each Platform," examines the current spending patterns and future intentions of online display advertisers and media buyers about the rapidly changing marketplace, and the role of third-party intermediaries such as ad networks and demand side platforms (DSPs). The study, which was conducted online by InsightExpress, surveyed 275 respondents between Sept. 17 and 29, and found that nearly a third (31%) of digital ad budgets are currently spent on general ad networks, but that share is expected to decline by four percentage points to 27% over the next 12 months as advertisers and agencies shift toward more targeted options.

Behaviorally targeted ad networks -- currently 24% of the respondents' budgets -- are projected to rise one point to 25%, while social ad networks will grow two points from 12% to 14%. The percentage of respondent budgets spent on premium publishers' direct sales organizations will remain even at 22%, while the percentage bought through DSPs will also remain steady at 5%.

The shifts reflect the sentiment of advertisers as they shift from a commodity-oriented focus, using display networks and DSPs as a means of procuring online display inventory cheaper and more efficiently, to a using the market to more strategically target online users.

Forty-five percent of respondents said their clients are specifically asking them to buy social ad networks, while 38% want them to continue buying directly from premium publishers, followed by behaviorally targeted ad networks (37%), general ad networks (27%), and DSPs (9%).

For all the noise surrounding the rapid rise of DSPs, which some see as an ad network "killer," DSPs were at best an ancillary option for respondents who plan, buy and approve online advertising budgets.

"DSPs are ridiculous," said one anonymous respondent. "They want to replace media agencies by buying remnant inventory. Uh... not good. We're not a fan here."

 

2 comments about "Advertisers, Agencies Plan Shift From General To Targeted Ad Networks, Remain Dubious About DSPs ".
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  1. Richard Frankel from Rocket Fuel, November 2, 2010 at 8:33 p.m.

    Joe -- thanks for the recap of this research.

    While the overall movement of ad budgets among interactive options is interesting, there is a bigger picture story hidden in this data (maybe) about how major brands are thinking about their digital media investment.

    I'd love to see analysis of how marketers and their agencies are thinking about the relative value of brand, DR and cross-objective media investments, and how they are really making those investments work.

    - Richard Frankel
    President
    Rocket Fuel, Inc.

  2. Julia Amorim from MediaNet, November 3, 2010 at 1:28 p.m.

    Many networks are driving the shift to targeted audience over environment and some are going a step further by marrying the best of both audience and environment. While the feelings among media buyer/agencies is that budgets may be shifting to embrace audience, this doesn’t mean a loss for all ad networks. However, the ones that aren’t evolving with this shift are in danger.

    A fixation on audience without regard for environment is not a sustainable or even practical solution for all advertisers. Here's my extended take on this: http://ad-tech.blogs.imediaconnection.com/2010/11/01/the-shift-to-audience-over-environment-is-it-right-for-everyone-all-the-time.

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