Tuesday, September 16, 2008

What's Your Ad Network's 'Secret Sauce'?

Hi everyone, Kirby Winfield here, WidgetBucks' Chief Revenue Officer.

Some colleagues and I are in New York this week at OMMA Global. Undoubtedly, ad networks will be a topic of the conversation at the show and it got me to thinking of an article I recently came across on Adotas, the interactive advertising news site, titled "Can 314 Ad Networks Really Thrive?"

It takes a close look at the sheer volume of ad networks today, where the industry is headed (what sort of consolidation will there be?) and factors that differentiate one network from another (more on this later).

The article's premise -- the number of ad networks -- makes for an interesting discussion launch pad on the current state of the network space, but in and of itself is a pretty big red herring. Do SEO firms, creative shops, media buyers, or any other online media service cease to proliferate at some arbitrary numerical inflection point? Absolutely not.

In any industry, talented and experienced individuals constantly create new businesses in spaces that have borne fruit in the past. Those who become successful (i.e. scale and staying power) displace the less efficient incumbents, either on the tail or at the head. In healthy economic or nascent growth spurt periods, the number of firms which receive exposure or become part of the accepted set that defines the industry may grow, but as the industry matures this normalizes. I guess one could say it all settles out in the end.

Yet this still raises some interesting questions: What makes a network viable? How do you become one of the “314”? Or better yet, a top 50 ad network?

To that point, the article ranks major differentiators by percentage, according to U.S. Agencies and Advertisers. Here they are the top five:

  • 28% Web Inventory Quality
  • 27% Targeting
  • 11% Site Transparency
  • 8% Service
  • 8% Optimization
I agree that Quality is tops on the list - no surprise there -- but I'd add four more to the list:
  • Scale
  • Ad fill
  • Specialize/verticalization
  • Sales team that knows the space cold
Even so, in this day and age, the attributes listed above are pretty much just the price of entry to the top-end network space. True differentiation comes through innovation. Some networks are on the forefront of behavioral targeting and data mining; others are focused on yield optimization and management; still others are stuck in the tent pole publisher remnant inventory game.

Here at WidgetBucks our own "secret sauce" involves creating engaging, interactive in-page applications that make all types of online inventory more valuable to publishers and more accessible to (and at the end of the day, safer and more comfortable for) brands.

And later this week, WidgetBucks publishers will be hearing a lot more on improvements and expansions around a number items on both the lists above, including targeting, optimization, reporting, and specialization/"verticalization." Stay tuned.

- Kirby