Backchannelmedia

Media; Asia's Newspaper for Media, Marketing and Advertising

By Hoare, Michael

Ad networks are hard to define properly and those promoting them have muddied the waters with confusing jargon. It's no wonder that marketers are confused and wondering how best to allocate adspend. Michael Hoare reports A central part of any online marketing strategy, ad networks in Asia are beginning to attract the kind of attention they do in the West. But compared to the relative vitality of the affiliate marketing sector, the offerings from the major ad networks are looking a little jaundiced to advertisers, causing widespread disillusion.

In their simplest form, ad networks are middlemen that pair online inventory and display advertising. Typically run on a CPM, CPC, CPA or hybrid-pricing model, publishers make money from selling their unsold digital real estate and the brand gets access to a targeted demographic.

"Bluntly, networks are vital to advertisers reaching out to customers online," says Nick Fawbert, head of operations for Aktiv Group Asia-Pacific. "Take Singapore as an example. In an average month over 195,000 sites are visited by the online population, so you're likely to need thousands of sites if you want to find them."

Fawbert adds that although the industry has failed to come up with a full definition of 'ad network', it might be likened to an "accountable sales promotion".

"It goes without saying that a network must contain multiple sites in order to be a 'network', but the term has been abused by boutique sales houses in an effort to appear larger than they actually are," Fawbert says.

Research shows that advertisers do not feel they are getting value from ad networks. Most advertisers believe an ad network provides low-cost reach but just 23 per cent of online advertisers believe they are any more cost effective than splitting the budget across individual websites. That was the finding of an April paper from Jupiter Research. The killer blow is that most advertisers want to decrease their reliance on networks as soon as possible.

Part of the disquiet among advertisers stems from the impenetrable fog of jargon that inevitably sends heads spinning. Charles Tidswell, managing director for the Southeast Asian arm of analytics firm Facilitate Digital, says an entire new language has sprung up around networks, which helps the industry protect their "own little domains". "Traditional planners don't know where to start and no one is ever going to explain it to them," he says.

Black-box sorcery means ad networks are typically an option for the digitally savvy but lazy, he says, or an easy option for befuddled buyers who want digital in their marketing mix, but have given up trying to decipher the jargon.

"If they can get through ad networks 101, what many advertisers come to realise is their budget may give them reach but often deep in the long tail," says Lawrence Wan, OMD's digital lead on the Intel account in Beijing.

With the power increasingly concentrated in the hands of a few players, premium buys that offer full transparency to advertisers on high-traffic sites are expensive. A budget buy is often a 'blind buy"-a package deal on remnant inventory where marketers are unaware of what websites their brand may pop up on. "With these kinds of buys, it can be difficult to actually see your ads. So I find that advertisers aren't altogether happy with that," says Wan.

Dig deeper and Tidswell says the bigger networks are caught in a spiral of trying to build the number of impressions. That may impress shareholders and potential new clients, but the end result for advertisers is homogeneity and clutter. "The challenge that a lot of the advertisers and publishers face is that there isn't a lot of difference between the ad networks," he says.

In the US the market is sown up by the big four: Google, Yahoo, MSN and AOL. Combined they attracted 60 per cent of all online adspend last year. Their reach has expanded with every small player they absorb. The world's biggest advertising network is Google's AdSense programme. Google places ads on more than a million websites in its network. In 'G-speak' they are the Google AdSense publishers. The boast here is that advertisers have access to about 80 per cent of the world's mosttrafficked websites. AdSense has partnered with Chinese mainland publishers Tencent, QQ, CCTV, sina.com.hk, vb.com, openrice.com, she.com, atnext.com and singtao.com, among others.

In Asia, depending on definitions, there are no more than 10 networks with the scale to be called a true ad network. One of the biggest players in Southeast Asia is integrated internet media, advertising, and technology group DMS. In its stable are Admax Network, Impaq Interactive and New Media. DMS CEO Grant Watts argues that there is a place for the smaller players. "As critics would argue, the lack of global presence is a challenge faced by many small players trying to establish their brand in the market," he says. "On the contrary, DMS' boutique nature enhances its offering, allowing for highly tailored and customised local solutions, making it a strong, nimble player."

The quest for the networks is not in providing inventory or even a metric but in delivery. "The challenge is to provide the best ideas in the best co-ordinated or integrated way," he says. "Clients today are looking for an integrated global solution to meet their needs and, for ad agencies, that can offer a wide range of alternative solutions."

As media continues to splinter, so too will the number and focus of online ad networks. The networks have increased their offerings to mobile and video advertising, full-service creative and targeting. Ads in blogs and digital video commercials are two areas Watts sees as potential for growth.

For marketers new to ad networks, Fawbert says a typical campaign in a more developed market will comprise around half of the expenditure going on premium websites, with the remaining half being spent on two or more networks.

"The thing with network planning is to always include two or more networks on the initial plan, and then play them off against each other to get the best performance," he says.

A change in mindset is required too. Planning the campaign should be easier, with less time spent on the nuts and bolts but more time spent in tracking its performance and tweaking it to reach the largest audience possible.

"The networks offer different sites and different prices, some are 'D-I-Y' and some provide total account management," says Fawbert. "The performance for every brand will differ. So the answer is don't torture yourself, don't be wowed by famous names, let the data do the talking."

"The challenge a lot of advertisers face is that there is not a lot of difference between the ad networks"

"The answer is don't torture yourself; don't be wowed by famous names, let the data do the talking"

Copyright Haymarket Business Publications Ltd. Sep 4, 2008

(c) 2008 Media; Asia's Newspaper for Media, Marketing and Advertising. Provided by ProQuest LLC. All rights Reserved.