Study Finds Online Publishers Increasingly Turning to Ad Networks
The use of ad networks grew from 5 percent of total ad impressions sold in 2006 to 30 percent in 2007, according to a recent pricing benchmarking study conducted by Boston-based consulting firm, Bain & Company in coordination with the New York-based Interactive Advertising Bureau.
The reason for the rapid growth in the use of ad networks is two-fold, according to the study:
1. The lack of adequate pricing tools and inventory management discipline is forcing publishers to seek out ways to sell large inventories of unsold ads; and
2. Large marketers are continuing to shift significant portions of their advertising budgets online and view ad networks as an effective way to achieve greater buying scale while driving down cost per thousands (CPMs), or the costs per thousand page impressions.
The study also showed that publishers who actively manage and use multiple ad networks can achieve higher revenue from display ads sold via networks.
Other key findings from the study include the following:
- Overall, online publisher revenue grew by 32 percent in 2007 over 2006, yet ad network revenue grew more than 50 percent as marketers boosted online spending;
- High demand for premium video inventory resulted in CPMs two to three times greater than display ads on average; and
- Most publishers in the study lack the necessary information to closely measure the impact of cross-platform sales, though most said that they focus on using cross-platform to drive volume rather than price.
To view the complete study, visit www.iab.net/digital_pricing_research.