online advertising network India News

Horizontal Vs Vertical Adnetworks


Call 2 publishers in a vertical and tell them to align with you non-exclusively (who says no to a sitting monitory opportunity?), take a “plug & play” 3rd party adserver (there are dozens of commoditised platforms to choose from), and then start your pitch to an advertiser. And you’re good to go.

It’s easier to open a network than launching a website these days. I hear of one opening up every month.

Natural outcome is clutter. Lots of it.

To break away, potential networks have started scampering for cover (read differentiation). One of the easiest one again has to become aligned to a particular vertical.

Such a cosmetic differentiation has the risk of staying just that – cosmetic and might not translate into a ‘must buy’ option for an advertiser.

Let’s take a look at the overall market size for a minute – In 08-09, ad networks are expected to continue to gain momentum with a 30 odd crores billings (6% marketshare). Currently, the top 1-2 Indian horizontal networks are together expected to corner about 75% of this universe, outside of Google. The rest are testing their staying power. With the horizontal game not yet settled down, as to whom the top 1-2 are, I think that the vertical game can only be sliced out once the dust is a bit settled.

Consider this: If you breakup the 500 crores that the Online industry is estimated to do in 08-09, verticals like finance, jobs, travel, matrimony, technology, automobiles take 80% of the chunk. With 6 odd verticals of a certain scalable size, it is narrow enough universe for the horizontal networks to be playing in. Had the vertical channels been a couple of dozen, focus could be something that could have been a focal point of discussion.

Going away from the data for a minute, to start with, for an entrepreneur, a passion for adnetworks comes with the role one thinks networks are positioned to play. It might take a few years to do this, but networks are today best positioned potentially to reach closest to the performance benchmark that Search has set of reaching out to the right user at the right time when intent is strongest. With a page click-through of 20% for Search (each ad on a search page gets roughly a 1-2% clickthrough, multiplied by 10 ads typically on a page), everything else in online advertising is distant – horizontals, social media, emailers, vertical publishers etc.

Today a media planner gets excited with a 1% CTR, so the opportunity gap is very high for the 95% of inventory on the Internet (non-Search). Networks have the potential of coming closest to this benchmark because of the sophisticated platform that they currently use, where audiences are sliced out and inventory is rated according to the performance on a particular type of products. So, as a monetization play, networks have the edge over even horizontals as the latter is a content play primarily.

By starting out as a vertical at this point in India, one is already out of the race of inching closer against Search. Verticals today are opening up so rapidly, because they are essentially content aggregation plays only, with no different platform play.

Coming back to the market - if you go deeper into any of the verticals, there are limited players, in most cases, less than 5 so the longtail around them is not as fragmented as the vertical play would have liked. For a network to call itself aligned to a vertical, it needs to have an exclusive representation of atleast 4-5 players which is difficult to do with such small pockets of supply that are easily accessible to anyone – let alone other networks, but even agencies. If the vertical network doesn’t control a substantial part of the total inventory, say 50% (which is difficult to go with such a small supply pool) by an accepted standard, then again it doesn’t get into the must-buy option. Too much reliance on 4-5 publishers itself in a vertical to have your business model depend on is also downright risky.

Choosing the vertical to play in has its own set of risks. 08-09 hasn’t been a good year for the finance and travel industries in general, and online advertising will also bear a brunt of this. A vertical starting out in an industry going through a rough patch can seriously jeopardise one’s projections for reasons outside one’s control. Horizontals are more insulated from specific industry ups and downs, by switching focus to cover the other critical categories mentioned earlier.

Let’s take this question from another angle – to what a customer really wants from an adnetwork - Scale & Performance.

By slicing out a much smaller niche, albeit a vertical, vertical networks are not viewed as a very scalable audience. Similarly, even so-called premium networks are judged by higher click throughs and leads. Brand monies (without ROI goals) follow to the player who has the perception of performing the best. And that happens, when a network has the history to prove past performance.

And that’s where the greatest challenge for a vertical network with few supply points locked in will find an issue.

Performance is not just a vertical content game. While contextual content works well and the performance of the vertical content leaders proves that, it is just one way that a network uses to target and optimize audiences. As targeting and optimization become more sophisticated, chasing the user irrespective of the content he is viewing real time increases the bandwidth to reach the right user and therefore, performance. To be in the network game for long term, a network will have to have some technology differentiator that its platform or platform top-up brings. The vertical players currently mushrooming are playing more around content, than technology.

Where the horizontal networks have made a dent into is the admonies currently flowing into the horizontal portals, and that’s where the scale opportunity arises. The sheer size of the audience base that horizontal networks, coupled with advanced platforms that horizontal networks are prepared to invest in, give it the potential unfair advantage that a growing company needs. Millions of audience profiles give a network the bandwidth to understand what products work better in which audience profiles, in most cases reactively. It is a ‘learning’ phase, rather than just a sure shot decision based on content.

Now, let’s approach the question from an advertiser point of view. Networks are slowly creeping into media plans these days, consuming roughly 5-10% of an advertiser’s budget typically. An advertiser is just beginning to demystify one network from another. With agencies controlling 80% of the spends, of most big advertisers, they are typically comfortable dealing with 1-2 networks per media plan, usually going by past performance to determine which network works out best for it.

In the US, where the vertical networks have been successful, players like Travel Adnetwork (TAN), Jumpstart etc, the timing of these players came about at a time when players like Ad.com and Tribalfusion matured the market, opened up new categories and the proliferation of content across several players, gave rise to this vertical play.

In India, the horizontals game is still wide open right now, so the verticals will require all the staying power they can muster.

Source: http://www.alootechie.net/content/horizontal-vs-vertical-adnetworks-%E2%80%93-a-view-trenches

Do Websites Require Ad Networks in India

Last couple of days i have been touching base with lot of online publishers across length and breadth of our country and have been hearing lot of commentary on how ESPN decided to go off Specific Media ad network and go solo in selling their inventory. Lot of them echoed they might want to consider following the same path others questioned the whole ad network model and how its in favor of advertisers instead of publishers.

Wont like to iterate what my response to them on same was but what would like to say is one needs to strongly understand dynamics of the industry before deciding what is best for them. Indian Internet Industry or even global for that matter works on lot of different metrics where for large advertisers agencies act as middle man on planners for finding out best performing avenues for spending clients marketing budgets.

Now this performance metrics could be audience reach rather matching of demographics, traffic generated to their message site, actual performance if its a commerce campaign etc.

Now lot of publishers will say we may measure up completely on all these metrics then why arent we able to access these budgets??

i) Agencies dont like to work with lot of publishers. Its too much logistics to manage as ops is last thing they want to specialize on.

ii)Agencies need scale, single point of contact and ability to undo its wrong mid of plan by change of demographics or variety etc. Which in case can mean moving completely from one publisher to another

iii) Agency like to minimize risk on media plans by mitigating to buy directly on CPA and limiting buy on CPM on clients favorites like Yahoo!,Rediff,MSN even their they negotiate on CPC etc.

iv) Agencies dont like to buy user generated content. even with all Web 2.0 - Forums,Blogs etc are still not hit with them for their marketing spends(except performance advertisers again CPA driven buy)

How do ad networks help

In India performance is not the tag or help optimize your inventory is still not some what criteria for selection of ad network. Its pure access to kind of advertisers and their ability to consume scale of your page view inventory.

How to evaluate an Adnetwork for your Site

Whenever you talk to an adnetwork please have following metrics to see if they are the best choice for you or not.

Q1. How many impressions can they consume from you per month?

Like all 10 million page views given can be consumed or not)

Q2. How big is their sales team? How is it spread?

This question will let you understand their accessibility to advertisers and pressence in all major cities like Delhi,Mumbai, Bangalore,Chennai etc talk about their reach.

Q3. Ask what advertiser campaigns are currently in system?

If you get answers on all DOTCOM’s like MMT,Simplymarry.com,naukri.com etc then you should again be little wary as these advertisers are one of the easier access as they are completely performance driven and wont value your inventory for its demographics etc.

Q4. Do they have a self serve model for publisher management?

This is essential for you to monitor on day to day basis performance of your inventory given to them etc.

Q5. Lastly try to find out what special they do to train sales team on advantages of having you on their network?

Do they prepare any media kit for your website announce to advertisers etc.

Till the time you have money and reach with agencies where marketing budgets are low hanging fruit it still makes sense to setup own sales team and control like ESPN otherwise you should take advantage of these ad networks working more as sales representation businesses in India to keep driving revenues from Internet Properties you own.

The resurgence of Internet marketing is leading to the renaissance of an unlikely model -- the humble online ad network. This time around, though, networks go beyond the banner-based, content-targeted model familiar to digital marketers.

The biggest recent news in the network arena was Google's expansion last week of its AdSense contextual ad offering. The search giant added .GIF and .JPG banner capabilities, a move that makes its network of small to mid-sized sites look a lot like yesteryear's traditional banner networks.

Meanwhile, behavioral marketing player Tacoda is building its own ad network to compete for search dollars. With AudienceMatch, Tacoda is mimicking the model popularized by Google's AdSense and Overture's ContentMatch, but it's targeting by behavior rather than by context.

Recognizing the competitive threat from behavioral targeting and performance-based players, several veteran ad networks have also begun to expand the range of targeting options available to customers. 24/7 Real Media, one of the survivors of the network business, will debut its behavioral targeting capabilities next month. BlueLithium, which just launched in January, will announce plans to offer contextual targeting for its network next week.

With all the news in the network business, ClickZ decided the time was right for an overview. We contacted a number of major ad networks to obtain their pricing models, targeting methods, network profiles and other details. Of course, our overview undoubtedly misses some players. We've also decided to include one -- aQuantive's DrivePM -- that doesn't strictly meet the definition of an ad network, though it functions similarly from the advertiser's perspective.

The result below:

The Return of the Ad Network
Network	Pricing	Targeting	Network Profile	Creative Type	Self Service?
24/7 Real Media	Mostly CPM	Contextual, will offer behavioral in June 2004	750 sites, approximately 50 of which are large sites	IAB standard units, including rich media	No
Advertising.com	CPA	*	Network includes Associated Press, Billboard.com, eUniverse and KnightRidder	IAB standard units, including rich media	No
aQuantive DrivePM	CPA auction	Behavioral, contextual and demographic	The top 250 publishers, as defined by MediaMetrix site traffic	IAB standard units, including rich media	No, but is expected to develop
BlueLithium	Mostly PPC; some CPM	Contextual with next week's launch of BlueTheory targeting	Around 1000 sites	IAB standard units, including rich media	Yes, as of next week
Burst!	Mostly CPM; PPC available for some campaigns.	Contextual, with some demographic targeting	Approximately 2,000 sites across 477 channels; mid-sized publishers represent the core of the network	IAB standard units and text ads	No
ClickAgents	CPA	*	*	IAB standard units, including rich media	No
Fastclick	CPM, PPC and CPA	Contextual, by 18 content categories, as well as by geography, bandwidth, daypart and other factors	6,200 active sites, mostly small publishers but large ones as well	IAB standard units, including rich media	yes, with limitations
Google AdSense	PPC auction	Contextual	Thousands of small- to mid-sized publishers and a few large ones	Text and banner ads	Yes
Kanoodle.com ContextTarget	PPC auction	Contextual, using topic matches	Sites include MSNBC.com, CBSMarketWatch.com and TheMotleyFool.com	Text ads, with the option of including a logo	Yes
Max Online	CPM	Contextual	Approximately 1,000 sites	IAB standard units, including rich media	No
Overture Content Match	PPC auction	Contextual	Several large publishers (most notably MSN) and numerous verticals	Text ads	Choose from self or managed service
Tacoda AudienceMatch	PPC auction	Behavioral, demographic	Predominantly large sites; full profile not yet released	Text ads	Yes
Tribal Fusion	CPM, sponsorships	Contextual, plus geotargeting and dayparting	700 publishers, with a wide reach	IAB standard units, including rich media	No
ValueClick Media	CPM and PPC	Contextual, by 17 channels; behavioral, geographic, demographic,day-part and other targeting options also available	Portals, vertical sites and niche publishers; 120 million unique users per month worldwide	IAB standard units, including rich media	No

* = Not available at press time.