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B-to-b ad networks make slow advance

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While broad-based ad networks have taken center stage as the darlings of the media industry, vertical b-to-b networks are slowly gaining traction with marketers that want to reach more targeted audiences.

In the last six months, there has been a frenzy of deals in the consumer ad network space, including Google's acquisition of DoubleClick in April for $3.1 billion, WPP Group's purchase of 24/7 Real Media in May for $649 million and AOL's acquisition of Tacoda in July for a reported $275 million.

But behind the scenes, smaller advances have been made by targeted b-to-b networks looking to reach industry-specific segments.

Reed Business Information, for example, in June partnered with Burst Media to unveil Reed Partner Network, a b-to-b ad network consisting of Reed properties and other b-to-b focused sites.

A technology arena ad network, NetShelter Branded Network, has been expanding its reach and in July ranked No. 2 behind CNET in comScore's audience measurement report on the tech category.

Other ad networks with specific b-to-b channels, such as ValueClick and Miva's Precision Network, are realizing success with marketers by offering media buys across segmented sites in their networks.

Media buyers wary

These networks have found ways to combat the most commonly voiced objection by marketers and media buyers when it comes to using ad networks for b-to-b campaigns—that they're not targeted enough.

"Network buys can be very effective in generating high impression levels and broad reach for a low CPM," said Jon Schaaf, VP-media at HSR Business to Business, Cincinnati, a b-to-b agency. "The drawback is that sometimes the run of network inventory is not as well targeted and campaign results can suffer."

Arlene Villanueva, integrated marketing and global media manager for business/IT at Intel Corp., agreed.

"As more and more advertisers look to influence end users during the consideration phase of the purchase cycle, a b-to-b ad network will simply not fit the bill," she said. "My current perception is that they may be better suited as a reach vehicle to drive mass awareness.

"Marketing organizations are being held more and more accountable for driving return on investments, and broad-reaching vehicles have not proven to be as effective in the media mix."

Steve Ustaris, group media director at Carat, also voiced concerns about the broad reach of ad networks.

"B-to-b audiences are extremely niche-focused," he said. "You have to be very specific about what content you're aligning your message to." He noted that because most b-to-b clients are trying to reach specific buyers who are at different phases of the purchasing cycle, broad-based ad networks often can't provide that level of targeting.

Fine Tune Targeting

However, some of the more successful b-to-b networks aim to solve this problem by providing targeted advertising across industry-specific sites within their networks.

NetShelter Branded Network, which debuted last year, focuses exclusively on technology and has more than 100 sites in its network, including Geek.com, Notebookreview.com, OSnews.com and sites within the TechGenix Network, such as WindowsNetworking.com and WindowSecurity.com. It has run campaigns for such advertisers as AMD, Microsoft Corp., Motorola Corp. and Verizon Wireless.

"We work with advertisers to identify the properties that align with their target audience. Then, depending on their specific objective—whether it's branding or direct response—we map out a campaign that is targeted across very specific content areas," said Peyman Nilforoush, co-CEO and head of agency relations at NetShelter.

For example, Microsoft is currently running a white paper campaign on the NetShelter Branded Network for Microsoft Dynamics, an integrated business management software package. The campaign includes banner ads and sponsorships on sites including WindowsNetworking.com and DaniWeb.com that drive IT professionals to a landing page with white paper downloads on topics such as CRM best practices and how to streamline business operations.

"The network offers them efficiencies in terms of cost," Nilforoush said. "The narrower they go, obviously, the cost increases."

Indeed, cost is one of the key benefits of ad networks, as they offer unsold inventory from publishers that is often available at a fraction of the cost of single-site buys.

"If someone wants to buy on EDN [a Reed Business property], they would pay a higher CPM than on the Reed Partner Network," said Jarvis Coffin, CEO of Burst Media, which formed a partnership with Reed Business to offer advertisers media buys across more than 40 sites serving technology, engineering, design and purchasing professionals.

"Agencies may be looking for a broader reach than just across the Reed magazines, and the guys who sell across the Reed magazines may find they can't satisfy that campaign because there are not enough impressions," he said.

In addition to the Reed properties, such as Kellysearch.com, Modern Materials Handling and Purchasing, the Reed Partner Network includes such sites as EDACafe.Com, MCADCafe.com and ShareCG.Com. The company declined to release the names of advertisers due to nondisclosure agreements.

Other broad-based ad networks, such as ValueClick and Miva, say they can offer b-to-b advertisers targeted opportunities by putting together custom packages across segmented channels in their networks.

For example, ValueClick offers channels for business and finance, and advertisers can create custom channels by picking sites within those networks on which to run campaigns.

Also, ValueClick offers virtual networks for advertisers by recommending sites that fit their particular target audience needs based on demographic and psychographic data from comScore.

"For b-to-b marketers, you really need to do media planning across the network," said Tony Winders, VP-marketing at ValueClick, noting that ValueClick has media planners on staff to help marketers optimize their buys.

Earlier this year, ad network Miva Media introduced the Precision Network, a pay-per-click ad network that lets advertisers deliver targeted advertising across 18 vertical industry segments, consisting of finance, insurance, mobile, office supplies, professional services and others.

While b-to-b ad networks are honing their strategies to appeal to more ROI-focused marketers, their future is unclear.

Take the case of ClearGauge, formerly B2BWorks, which started off in 1999 as a b-to-b ad network. In 2005, the agency changed its name to reflect its new focus on online marketing services and measurement, a move away from the ad network model.

The ROI Influence

Marketers and media buyers agree that with the increased focus on ROI, other forms of targeted online marketing may make more sense for them.

"Given the expanded media landscape and Web 2.0 advances, the digital environment enables marketers to drive targeted, relevant messages in areas where the audience is more receptive to receiving them," said Intel's Villanueva.

"Further, advanced online analytics have demonstrated that contextual targeting drives higher engagement levels."

Added Schaaf from HSR, "The majority of media buying we do for clients is centered on developing and delivering highly targeted campaigns, which requires us to very selectively pick and choose the media."

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