As an industry, we are an ever-changing ecosystem with new technologies and terminology cropping up every day.  Ad network, Ad exchange, Vertical Network, Behavioral Network, Network Optimizer…what does it all mean?!?

With over 400 ad networks in market and new technologies cropping up daily, the possibilities for publishers today are endless and the challenge is to understand your remnant options and find the best fit for your company.

Lets explore the terms, define them, provide pros and cons and discuss!

Ad Network – The oldest of the terms explored here, the standard definition of an ad network is a company that connects advertisers to web sites that want to host advertisements.   Ad networks provide a great way for a publisher to monetize any unsold ad inventory and there is an wide variety of networks that specialize in display, mobile, video, standard ad sizes, rich media, pop ups and more.  Like the saying, “there is an app for everything”…there is a network for everything.

Pros: Networks provide publishers with an easy way to monetize ad space that they are unable to sell on their own.

Cons:  It is difficult to find one network that will fill your entire inventory at premium rates – so many publishers utilize multiple partners.  Multiple partners often leads to more legwork on the part of the publisher and can cause conflicts between your direct sales channel and issues with ad quality

Click here to see an sample list of the top 25 ad networks as reported by comScore MediaMetrix.

Vertical/Niche Network:  Vertical networks are networks that represent niche content publishers and/or audiences.  There are many in the market today that cater to categories stretching from gaming enthusiasts, glamour girls, business and technology, baby boomers and more.

Pros:  These niche or vertical networks normally drive a higher CPM than standard ad networks because of their targeted nature.

Cons: The fill rate tends to be lower with these types of partners, so normally a publisher will have to contract additional remnant partners to fill their entire unsold inventory.  Additionally, because of their targeted nature, they often sell to advertisers that your direct sales team is pitching, so there can be an increase in sales channel conflicts.

Examples of vertical networks include GlamMedia, Travel Ad Network and SportGenic

Behavioral Networks – Similar to Vertical networks, behavioral networks offer advertisers a more targeted buy via the tracking information they have on visitors to your site and their related surfing habits.

Pros:  Higher rates based on the level of targeting.

Cons: There are many debates around consumer privacy these days and behavioral targeting sits in the middle of these debates.  They track only non-personal data but a publisher needs to consider their visitors privacy as well.

Examples of Behavioral Networks and Networks that offer this targeting option include Audience Science, Collective Media, and Burst Media

Ad Exchange:  Snowballing with momentum, the term ad exchange has cropped up in advertising circles as well as investment firms on a daily basis over the past year.  The definition of an ad exchange can be defined as a technology platform for buying and selling online ad impressions.

Pros:  Ad exchanges aim to cut out some of the middlemen between advertisers and publishers, creating a fair market where inventory can be bought and sold easily and free of additional fees for publishers.

Cons:  Although there has been a boom in exchanges this year, the marketplace from the buy side is still not properly populated with advertisers and agencies.  Much of the inventory being purchased on exchanges is by ad networks at reduced rates.  Additionally, publishers have been unable to gain volume at premium rates in the exchanges without exposing their brand, so they either derive small volume from exchanges or lower their rates to a normal remnant level.  Additionally, the self-serve model still has some risks for publishers in terms of site security.  Most of the exchanges are doing their best to install protections against malvertising but the risk is still higher than other options.

Examples of some of the premiere exchanges available to publishers and advertisers today include AdECN, ADSDAQ, Doubleclick and RightMedia

Faced with these options (and many more I have neglected for sake of the length of this post) how does a publisher best move forward in this convoluted market?

Remnant Optimizers and advances in publisher/seller tools are the new frontiers in this industry and are aimed directly at the goal of helping publishers regain control in the market and find the most profitable and efficient ways to monetize their ad inventory.

Similar to the agency model, remnant optimizers are designed to help provide a program based on expertise and technology to manage, maximize and optimize a publisher’s remnant inventory.  Optimizers can help a publisher find the best remnant partners or mix of partners, and over time help them find ways to sell their inventory more closely to the way advertisers have been buying.

It will take some time to see how the new players in the market will reshape the remnant marketplace, but I believe there is a movement afoot to swing the pendulum of power back to the content makers – which is music to my ears!

Send us your comments, questions, thoughts feedbacks or feel free to tell us some of your own new industry terms!!

This entry was posted on Tuesday, June 8th, 2010 at 10:57 pm and is filed under Latest News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.