Study: Ad Networks' Reach Lures More Marketing Dollars

Many media buyers and planners rely on ad networks more heavily today than two years ago, according to a new study by ValueClick Media/FastClick.

The report was based on an August survey of 300 media executives, conducted online by Insight Express using members of the MediaPost advisory panel.

Forty-two percent of media buyers and planners who use ad networks said they spent more with such networks now than in 2003, while 30 percent of respondents reported that spending was flat from two years ago, and 16 percent said their ad network spending had declined; an additional 12 percent said they were unsure whether spending on ad networks had increased or decreased.

At the same time, media execs still are wary about where ads placed on networks will appear. When respondents in the ValueClick/FastClick study were asked why they might not work with an ad network, the most common reason was concern about where ads would appear (cited by 46 percent of respondents). Thirty-eight percent also said they worried about the quality of sites within a network.

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Why did they use networks? The most common reasons were reach (cited as a top reason by 72 percent of respondents) and targeting (mentioned by 56 percent).

David Yovanno, general manager of ValueClick Media/Fastclick--which merged in September--said his company's experience bears out that networks have become more pouplar. Today, he says, about 80 percent of companies that use ValueClick renew their business, compared to 30 percent last year.

Additionally, at Advertising.com, the ad network bought by America Online in August of 2004, third-quarter revenues reached $66 million--compared to revenue of about $132 million for the entire year of 2003.

A recent study by Deutsche Bank and MediaPost also revealed that one in three media executives saw network inventory becoming more valuable recently. Thirty-four percent of respondents to a third-quarter Deutsche/MediaPost survey said prices rose for run-of-network inventory, while 56 percent said pricing was flat and 10 percent saw drops of between 1 and 10 percent.

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