• by Adam Gerber , March 15, 2006

No, for you Steve Winwood fans out there, that headline isn't a typo. I'm not going to talk about Winwood's 1980 hit album "Arc of a Diver." Instead, I'm addressing the value of a network -- or at least the evolving value of a network, and the performance "arc" it can provide to advertisers and publishers alike.

Let's define our terms: I am not talking about CBS, ABC, or NBC -- branded networks representing specific programming offerings. I'm talking about today's aggregated pools of inventory that are traded back and forth between publishers/programmers, network aggregators, and advertisers. (Full disclosure: I am in charge of a new Internet TV advertising network initiative.)

Branded networks and network aggregators offer two very different value propositions to advertisers, and we are starting to see that play out in the world of advertising. As fragmentation and commercial avoidance increases, branded networks have the ability to deliver brand messaging and communication in program content/ context. We're seeing this exponentially proliferate via TV program integrations and high-value sponsorships online.

Meanwhile, aggregation networks -- and unwired networks in the traditional TV space -- offer advertisers a way to access useful portfolios of ad inventory.

The debate has recently focused on why programmers and publishers should or shouldn't put a portion of their inventory into aggregated network offerings. The presumption is that the sales structure we have today, and the buying strategies advertisers employ, will remain status quo. That's just not a good assumption in my mind.

I've been toying with an idea that not many people agree with. To wit: I believe we are slowly moving to a radically different media landscape where branded networks and network aggregators will offer distinct advertising solutions. In many cases they will be complementary, not competitive. The real value of an aggregated network isn't the inventory it has to sell; it's the underlying intelligence that it can apply against real-time advertising delivery to drive the "arc" of ad performance.

A network's infrastructure -- the centralized servers and databases that can be used to collect behavioral, geographic, and other usage behaviors -- is the true value for advertisers. Leveraging that intelligence to drive true exposure management at a campaign level, contextual addressability, conversion optimization, or message management is where the value lies.

The problems, though, are scale and ubiquity. There are many competing aggregator networks that sell, and resell, the same inventory. Marketers don't get to leverage true campaign-level optimization or addressability unless they run exclusively across one network. And then they only have access to the inventory supplied by that network.

We need to stop thinking about aggregation networks as silo offerings and competitive sales organizations. Aggregation networks need to be redefined as open, underlying layers of infrastructure and intelligence that can be leveraged across programming outlets, distribution platforms, and geographies. It will require a significant business model change by programmers and distribution companies alike to recognize that an open targeting platform, accessible by all, brings value to all.

How we get there is anyone's guess. But a number of solutions are evolving in both TV and online media. Companies like Invidi and Visible World are creating solutions that enable programmers, distribution companies, and advertisers to aggregate, address, and deliver advertising in new ways. In the online space, companies like Right Media are building marketplaces where inventory can be better managed across multiple suppliers/ buyers. And cable, satellite, telecom providers, along with online portals, which have vast amounts of data and visibility into device-specific usage, have a tremendous potential to offer new forms of cross-device targeting.

Sure, there are many issues to be tackled, from privacy concerns to business model changes. And on the agency/marketer side, planning, buying, and implementation strategies will have to shift. But a decade from now, my bet is the debate will be more about how to best leverage open network solutions than how to protect inventory pools or business models.

As Steve Winwood sang, "While you see a chance / Take it."

Adam Gerber is vice president, ad products and strategy, at Brightcove, an Internet TV service. (agerber@brightcove.com)