Let's start with what should be plainly obvious -- networks bring scale. Lots and lots of scale. They bring ease and a single point of contact for purchasing large quantities of advertising inventory or audiences. They also enable buyers to slice and dice an audience into niche segments in ways that single sites simply can't.
Through a network, advertisers can identify and deliver mass impressions to specific behavioral or demographic attributes that would leave most individual sites under-delivering. Not that they don't have the technology or a quality userbase, but many sites lack the scale to deliver it efficiently. The lack of targeted impressions on individual sites is even more evident when talking about video inventory. This issue is solved by video ad networks that aggregate hundreds of sites to help meet an advertiser's goal.
Also, while it is true that networks are typically a more cost-effective option for advertisers, the notion that all ad networks produce rates for publishers at 1/10th of what they would have sold directly is pure fallacy. Brand focused and video ad networks, by the nature of the ads they deliver and the content they monetize, bring much higher CPMs to publishers than a traditional network solution.
So where do networks fit in? I'll take nothing away from the brand halo effect of working with top-tier publishers, but their finite inventory can be expensive and not necessarily any more effective on its own. Today's explosion of available, monetizable video content is occurring with greater momentum in the mid-tier, or mid-tail of the Web. Quality, niche content is being produced by professional content producers for the Web at a fantastic pace. This content is being viewed not only on the Top 20 Web properties, but actually on a greater scale in the mid-tier through licensed relationships and syndication platforms. These mid-tier sites are also creating their own professional quality content that fits their category niche.
Very few of these content creators and websites where the content resides have the ability to monetize it. Even fewer have the ability to monetize it effectively through yield management, targeting and large brand-focused sales teams with the right connections to Madison Avenue. This is where a network is needed most. It serves to maximize the revenue for their publisher partners without burdening them with the complexities of video ad delivery and its constantly evolving ecosystem. .
User-generated content gets a lot of attention with each new viral hit but brand advertisers, for the most part, have been very cautious in moving dollars to this area. They prefer their brands to be associated with quality content. This is also why blind ad networks cannot work in the video space. Brand advertisers need to feel 100% comfortable that their brand will be protected from harmful content (adult, violent, controversial, etc.)
In the end, the networks - standard, vertical, horizontal, video or otherwise - that bring true, demonstrative value and expertise to their publisher and advertiser clients will not only survive, but they will thrive.