Where To Now For The Ad Network? Senior Ad Net Execs Discuss The State Of The Present Model

Recently ExchangeWire asked a number of leading and emerging ad network players the following series of questions to get their perspective on the changing European display landscape:
“There’s been a lot of debate around how ad networks can work with the buy and sell side – especially with the advent of SSPs Agency Trading Desks and DSPs in the European market. How can ad networks add value to advertisers and deliver more revenue for publishers? Will we see consolidation – and will ad networks with proprietary tech, inventory or data take a greater share of budget from media plans?”
Here Microsoft’s Zuzanna Gierlinska and Specific Media’s Daniel Stephenson discuss some of the key issues.

Zuzanna Gierlinska, Director Microsoft Media Network, EMEA

The media network has taken a battering of late, but what’s new. Since their inception networks have had the finger pointed at them for their cowboy tactics, high margins, cookie bombing, dodgy inventory… you’ve read the stories. Now it’s the advent of new technologies and trading models that are set to undermine the network business.
But before we write networks off as having no future, let’s take a look at how they got to where they are today. With over 10 years market existence under their belt networks have grown to command a significant amount of digital ad spend and are a standard element on the majority of agency media plans. In the UK alone networks spend accounts for over 40% of display revenue (Econsultancy Online Advertising Network Buyers Guide)
So why do we hear the network model needs to change?
The reality is that the network model has always been in evolution and networks have often been at the forefront of adopting new technologies and data capabilities. They are by their very nature dynamic, responsive to the environment around them continually innovating and evolving to drive better results knowing that’s the way to secure on-going demand and supply partners.
Is this new wave of technologies a threat for networks?
As the network sits in a pivotal position between supply and demand they are best positioned to take advantage; Real Time Bidding (RTB) is of huge benefit, networks were the first to play in the exchange space and are already expertly accustomed to layering data intelligence onto impressions. If you look under the hood of the Demand Side Platform (DSP), Exchange or Sell-Side Platform (SSP) these business have been developed out of the network model, most often by people with past media network experience.
Two other key considerations: Media & Performance
Networks fundamentally understand the complexities of acquiring and managing supply and continue to be a large source of discretional inventory revenue for publishers whether this is brought direct, via an SSP or through an exchange.
From a demand perspective inventory volume from a network is guaranteed, you receive what you book. But it’s not just volume it’s also quality that counts. Networks brought about the first industry self-regulation best practice with the introduction of the IASH. Today Exchanges are still struggling to provide similar regulation so the risk is directly placed back into the hands of the media buyer. The growth of ad verification companies shows the concern has gone beyond just the inventory type to ensuring the right frequencies, placements and audiences are adhered to. Who better to manage this detailed level of delivery than a network whose technology and manpower enables daily/hourly monitoring and optimisation? The recent TrustIndex report from Double Verify showed the traditional media networks on top with the lowest number (2%) of non-compliance incidents: http://www.doubleverify.com/resources/trustindex
In terms of performance be the end result to target a specific outcome (DR) or audience type (Brand) networks have invested heavily in technology, data and skillsets to drive ever improving ROI. Whether you’re buying on a CPM, CPC or CPA a network will guarantee the end result and take 100% of the risk in delivering it. However, where does the buck stop with an agency buying on behalf of their advertiser via their own network? Or even through an Exchange? Who will compensate the advertiser for mistakes made, performance targets not achieved or under-deliveries?
And finally a thought on consolidation. You’ve all by now seen that busy colourful slide awash with logos depicting the new media/technology landscape. If consolidation needs to happen anywhere it’s in the DSP, SSP, DMP space and already we’re seeing these entities evolving to provide more end to end solutions.
Networks are survivors; their model continually evolves to add value at both the supply and demand side of the chain through the service and performance they deliver. Ciaran’s recent article on the ‘Death of Network’ hailed the Agency Network as the new champions. It’s questionable as to whether this model will really take off given the challenging contradictions is poses.
So, is the Demand Side Network the future? Maybe… In truth whatever the label advertisers will continue to demand a managed media buy where the guarantee of inventory, delivery and performance is carried by the media owner. And as advertisers become more digitally savvy, increasingly looking to connect with their specific audiences across all phases of the purchase funnel, networks are favourable positioned to maximise the benefits from the new technology and data capabilities around them and as always deliver results.

Daniel Stephenson, Senior Director Category Development, Specific Media

The European display advertising landscape is ever-evolving. In the last 18 months, DSPs, SSPs, exchanges and other technology-led platforms have brought new business models to the marketplace. But at Specific Media, technology is just one way we deliver value for advertisers and publishers.
Firstly, with Specific Media you get heritage. We’ve worked in this field for 12 years. That’s 12 years of experience, relationships, proprietary data and development of leading edge technologies, which cannot be acquired overnight.
People also matter as much as technology. Our experienced team has a broad range of skills, working across planning, sales, servicing and more. We continue to hire excellent people with a blend of on and offline skills gained in agency, client and publisher environments. Thanks to this breadth of experience and talent, we have a deep understanding of communications, not just the buy and sell side of display.
And with real people you get real relationships. There’s a reason why we have a loyal network of premium publishers and why we’ve topped the IPA’s Media Owner Survey for the last three years. We offer clients and publishers consultancy and expertise, we help build revenue, and we put huge effort into managing relationships with all of our valued stakeholders.
By combining our premium display network with new launches in video, a dedicated research function, innovative ad formats and consumer data partnerships, we continue to develop a platform that enables clients to drive performance, build brands and engage users. This is all under-pinned by our service-led approach and quality of data and targeting.
All this makes us a strategic marketing partner, not merely a targeting tool for advertisers and a revenue stream for publishers. If you’re an agency, we’ll do more than target the audience you want to reach; we’ll help you build engagement with new and existing audiences. If you’re a publisher, we’ll do more than monetise your inventory; we’ll help you better understand your audiences and identify incremental revenue streams.
Specific Media is set to continue on this trajectory. We have a growing range of integrated products that we can offer agencies, advertisers and publishers, and we’re continually re-evaluating the definition of what it means to be an ad network. We also have a number of exciting developments in the pipeline for 2011. We haven’t stood still in 12 years and we’re not about to start now.