RealTime IT News

Growing Ad Networks Shaking Up Online Ad Spend

America Online's Platform-A tops the U.S. rankings for ad networks. That puts Platform-A ahead of Web heavyweight's Yahoo's Ad Network in second-place and Google's Ad Network, in third, according to a comScore report out today. The research firm also said online ad networks posted double-digit growth while grabbing market share from the big sites that sell ad space.

The ranking of the top 25 ad networks based on their reach among U.S. Internet users for April shows AOL/Platform-A reaching 176.5 million Internet users, or 91.5 percent of the total audience, followed by Yahoo Network, with 167.1 million and Google Ad Network with 164.5 million.

Those not familiar with online ad networks, might be surprised to see Internet behemoth Google placing third, but industry watchers say Platform-A has been top dog in the space for some time.

"AOL/Platform-A has had the top spot for a long time. The ad network includes Advertising.com, which has historically had a very wide reach, plus a few other ad networks (Quigo, Tacoda) which give it an even more expansive reach. So in that regard, it's not particularly surprising since AOL has always had a strong position in the ad network space," Andrew Lipsman, comScore's director of industry analysis, InternetNews.com.

Other key findings of the study show that newcomer Fox Audience Network ranked sixth, reaching almost 150 million people, while several ad networks in the top 25 achieved double-digit growth during the past year, led by Turn Inc., up 121 percent, CPX Interactive, up 88 percent, and 24/7 Real Media, growing by 48 percent.

Indeed, the new rankings showing double-digit growth comes at a time when online ad networks are transforming the way online advertising works.

Basically, the ad networks match advertisers with Web publishers, connecting sites that sell ad space with advertisers that want to reach potential customers, often based on shared interests, for instance, sports, outdoor hobbies or travel.

The networks are generally comprised of lots of smaller, lesser-known sites and, as a result, advertisers can reach audiences as big as those at the super-sized Web sites, but at a fraction of the cost. As a result, the ad networks are grabbing more online ad dollars -- and according to comScore, growing at a rapid clip.

New ad networks emerging

"Underscoring the growing importance of ad networks to the digital advertising economy, each of the top 25 ad networks has expanded its reach during the past year," Jack Flanagan, comScore executive vice president, said in a statement. "It almost seems that new ad networks are emerging every day, each aimed at helping advertisers achieve their campaign objectives, whether it's to deliver reach and frequency or to target a specific audience segment."

This supports recent research from a Forrester study "Online Advertising Predictions for 2009" by analyst Emily Riley which said in part:

"Seasoned interactive marketers will turn to ad networks to find bargains. Interactive marketers will look to save money by taking advantage of services provided by ad networks, including creative and analysis, in some cases abandoning their agencies or past content partners in the process. Additionally, online marketers turning away from high prices on branded sites will be looking for value on networks in the form of targeting and bargains on sponsorships.

"What does it mean? Networks that offer free services and technologies or those with brand-focused offerings that cost less than high-end content sites’ offers will do well due to the pressure for better ROI. Brand marketers must be willing to share data with ad networks," says Riley.