Mark Josephson, a very smart guy, has a good editorial in mediapost that makes the case for how ad networks should sprout up.
He notes that ad networks in many cases are bigger, in aggregate, than the leader in categories. He cites ESPN.com as an example, which is smaller than ad.com’s sports category. He argues that ESPN, with a direct sales force, could better represent those smaller sites in ad.com’s sports category.
I love this strategy on a number of levels.
First, Google showed that the way to build an ad network was to establish category leadership and exert your competitive advantage against pure-play ad networks like Overture, Looksmart or Findwhat in signing syndication deals. All those three are essentially dead (with Overture being dismantled by the decision of MSN to establish AdCenter and others signing with Google). Google can squeeze out any of them.
The data. This is the oxygen of ad performance. ESPN could better target the ads by virtue of knowing what they do about advertisers on sports sites and living and breathing sports media. They also see what sites in the network perform the best and that basically becomes a data-driven approach to business development and corporate development.
I don’t like the business of pure-play ad networks but I do like the strategy of category leaders extending their reach through an ad network suplement.
