Ad Networks and Agencies: The Next Wave in Display Advertising

After years of unfulfilled promise, local ad networks have reached maturity. Stories of CPMs doubling and large “spot” buys mean that the floodgates have begun opening for networks that offer targeted banners down to local websites. It may mean a bonanza for local media managers, many of whom operate sites with half their inventory unsold. The biggest beneficiaries are likely to be newspaper, TV and yellow pages websites, which control 80% of all local banner advertising, as well as the ad networks themselves. This report details the movement in online network banner placement and a flip-flop change in the amount of sales for untargeted or “run of site” banners (which is expected to fade into almost nonexistence in five years) and the amount of targeted display advertising. The 26-page report offers includes 15 pages of tables, charts and other data detailing the upward movement for local online network advertising. Please note: this is delivered as a Zip file.

Additional Information

Executive Summary

The online advertising networks that have been working for national sites and national advertisers are working their way down the food chain to local sites and small businesses, bringing with them more choices and more opportunities - and more ways for smaller players to miss the boat.

Ad networks - and the technology that supports them - now handle a significant share of local as well as national ad placements, and that share will continue to rise, especially at the local level, by more than 80 percent in the next four years. Ads placed on networks and through exchanges that handle multiple networks can be set to appear on local blogs, company sites, and local government sites as well as mobile devices. The science of placing search ads has come to the display ad world, and advertisers have unprecedented opportunities to target their messages.

The rise in the use of ad networks is being led by many of the same types of businesses that led the charge into the online advertising space in the first place - General Merchandise, Real Estate, Finance, and Telecommunications - but smaller businesses like restaurants, real estate agents and local shops are also seeing the merits of using direct response mechanisms such as coupons and deals and the power of social networks to build their brands. This focus on targeting is fueling a shift in online display advertising from run-of site to targeted banners.