A D N ETWORKS AND A D E XCHANGES

W HAT IS AN A D N ETWORK ? An ad network is an aggregation of websites’ ad supply that is made available to advertisers for sale Advertisers pay the network, the network distributes the ad to websites in their network, they keep their commission and send the net payments to the publishers Ad networks serve the advertisers’ ads through their ad server They can have different pricing models – CPM, CPC, CPA Large publishers often sell only their remnant inventory through ad networks (typical numbers range from 10% to 60% of total inventory being remnant and sold through advertising networks) Smaller publishers often sell all of their inventory through ad networks

T YPES OF A D N ETWORKS Most common types of ad networks: Blind (or General) Networks : These networks offer very low pricing to advertisers in exchange for not revealing which websites their ads will be on. Advertisers usually have no control of ad placement or position. The pricing model is typically CPM. Vertical (or Niche) Networks : These networks offer advertisers ROS (run-of-site) advertising across specific channels – either content-based (i.e. Auto or Travel) or brand extension-based (i.e. Glam, Forbes, Martha Stewart) Targeted Networks : Sometimes called “next generation” or “2.0” ad networks, these focus on specific targeting technologies such as behavioral or contextual. Targeted networks specialize in using consumer clickstream data to enhance the value of the inventory they purchase. (Behavioral targeting uses information collected on an individual's web-browsing behavior, such as the pages they have visited or the searches they have made, to select which advertisements to display to that individual. Contextual targeting involves scanning the text of a website for keywords and returning advertisements to the webpage based on what the user is viewing.) Representative (or Rep) Networks : These networks represent the publications in their portfolio, with full transparency for the advertiser about where their ads will run. They typically promote high quality traffic at market prices and are heavily used by brand marketers. The pricing model is generally revenue share. Demand-Side Networks : Advertising agencies are now creating their own networks to retain more of their clients’ spend.

L ONG T AIL IN A DVERTISING The largest portals, websites, and search engines have the largest individual reaches online The long tail consists of millions of websites that may have lower reach individually, but more targeted audiences Networks aggregate websites in this long tail

T OP A D N ETWORKS BY R EACH For more examples of ad networks, go to:

H OW D OES B ID 4S POTS D IFFER F ROM AN A D N ETWORK ? Bid4Spots offers more transparency than blind networks, as we reveal which websites the advertiser’s ad will be on once the auction is over Bid4Spots can offer more targeting than many networks by allowing the advertiser to specify their target demo, markets, categories, and days Blind networks may be able to provide lower guaranteed CPMs, but the reverse-auction model may make Bid4Spots’ pricing competitive

W HAT IS AN A D E XCHANGE ? Ad exchanges are technology platforms for buying and selling online ad impressions They offer website ad inventory for sale in real-time, forward auction-based models

E XAMPLES OF A D E XCHANGES DoubleClick Ad Exchange (owned by Google) AdECN (owned by Microsoft) Right Media (owned by Yahoo!) ADSDAQ Exchange (owned by ContextWeb) For an explanation on each of these exchanges, go to:

H OW D OES B ID 4S POTS D IFFER F ROM AN A D E XCHANGE ? Bid4Spots has a reverse-auction model, forcing the publishers to compete against each other to bring the resulting CPMs down (as opposed to advertisers bidding against each other and raising the resulting CPM) Bid4Spots’ auctions will take place every Thursday, whereas many exchanges can be used everyday

SOURCES