Friday, August 15, 2008

IAB: Ad Network Use Surges -- Where Do We Go From Here?

The Interactive Advertising Bureau (IAB), along Bain & Company yesterday released some interesting study results about the use of ad networks. In summary, their joint research found that the use of ad networks has increased from 5% of total ad impressions sold in 2006 to 30% in 2007. The study suggests that media companies are turning to sales intermediaries (i.e. ad networks) to sell off excess inventory.

The report claims that one of the reasons behind the rapid growth is that large marketers continue to shift significant portions of their advertising budgets online and view ad networks as an effective way to achieve greater buying scale and drive down CPMs.

Since launching WidgetBucks last October, we have continued to see trends that closely match the IAB study findings, largely with our CPM display ad relationships. While the advertiser/ad network relationship has always been an interesting one, we at WidgetBucks feel a key to growing these relationships in the future will require work on both sides.

Specifically, it is incumbent upon ad networks to provide as much transparency to advertisers as possible, while advertisers need to get increasingly comfortable with brand distribution across the Internet. For marketers, brand is their currency, so naturally they are adverse to placing that brand into places unknown, but as technology advances to more precisely target these ads, it's time to let go, even if just a bit.

See the full IAB/Bain press release.

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