Seems like every week there’s a new story about the “death” of ad networks.  Yes, the increasing number of industry reports has given us reason to doubt the sector’s long-term viability, especially considering the tales of  “cookie cutter” networks struggling to emerge intact from the recent economic recession.  Yet, there seems to a silver lining as the ad networks are showing strong signs of a comeback, due mostly to a focus on efficient pricing and delivering new service offerings from continued investments in technology.

Comscore’s March 2010 report indicates that Microsoft Media Network increased their unique visitors by over 33% in the last year. Could anyone have predicted this in early 2009, at a time when sale forces were cold calling and knocking on marketers’ doors every day in a desperate attempt to hold onto their jobs?

A weak economy could have been a contributing factor to why marketers opted for ad networks instead of purchasing directly from sites. But a recent article in AdAge indicates that marketers are now shifting their online budgets back to content sites as the economy recovers, though it will be interesting to see if this will keep up. Many things can be blamed on the economy, and it’s imprudent to state that ad networks will lose their market share to content sites (speculations are that maybe to demand-side platforms and ad exchanges, but that’s a separate conversation); in fact, it looks like the opposite may be true.  Leading ad networks such as Advertising.com and Specific Media are not only surviving, but they‘re growing by leaps and bounds, and at an unprecedented rate of growth.

Some ad networks already offer multiple service lines and packages, in the hope of becoming a “one stop shop.” Ad networks such as Halogen Network and Martini Media Network attempt to offer a full service buying experience, from brand building, customized marketing programs and efficient customer acquisition. By their logic, why would a marketer spend time working with multiple vendors and comparing and negotiating rates or coordinating release schedules, when instead they can do everything with a single ad network?

Furthermore, these new ad networks are not just more convenient to marketers, but they‘re also continually investing in upgrading their service offerings to provide everything from simple demographic, geographic, content and behavioral targeting to sequential re-targeting and auto-optimization. And let’s not forget that ad networks provide a far greater advantage over publishers when it comes to a broader audience reach, much more efficient pricing, and vast inventory of premium content.

For their part, publishers have been trying to fend off the appeal of ad networks by continuing to rely on their ability to offer “immersive” media opportunities, such as premium custom sponsorships and other services that ad networks have not yet been able to replicate.  However, there are signs that ad networks are breaking down the barriers of publishers’ proprietary offerings.  Some, such as Undertone Networks, already offer marketers the option to purchase high-impact full-page or homepage units on premium sites. Currently, publishers still have control over selling these opportunities directly, but as with everything price is the most critical factor, and once both sides agree on mutually beneficial terms, immersive media offerings will also become part of the ad network’s service package.

Transparency and accountability is another argument commonly cited as a weakness of ad networks, but they’re quickly adapting their business practices and dealing with this issue head on.  Many networks including InterClick or Collective have been offering complete site transparency for a while.  Furthermore, ad networks have the ability to create custom site channels specially built for a single advertiser.

Third party verification tools and services are also becoming part of the ad networks’ offerings, allowing marketers to receive alerts when their ads run on sites they deem unacceptable (service providers in the ad-verification space, including DoubleVerify or AdSafe Media use tracking technology as well as human analysis to identify misplaced ads).  It’ll only be a matter of time before ad networks will provide marketers the same trust and assurance that their publisher counterparts presently offer.

So despite the premature obituaries, ad networks are here to stay, and they’ll keep evolving and improving their technology solutions and service offerings.  Far gone are the times when ad networks only received a small fraction of the advertising budget or incremental “test” funds, one day they may be receiving ALL the online ad spend.

Related posts:

1. Are content networks (Google, Yahoo, Pulse, etc) good for business?