Publishers benefiting from online ad networks

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Online ad networks have been busy making announcements and introducing new products in the past month:

  • Bizo, an online ad network that reaches businesspeople, launched its Bizo Audience Marketing Platform (BAMP). It provides a dashboard that enables b-to-b marketers to precisely target and segment a business audience and adjust ad campaigns on the fly.
  • QuadrantOne, a venture formed by Gannett Co., Hearst Publishing Corp., New York Times Co. and Tribune Co., debuted Q, a real-time bidding network that allows marketers to reach these publishers' local audiences.
  • IDG TechNetwork, an online ad network of technology blogs and websites introduced a beta version of the Tech Media Exchange. This real-time bidding platform, which also provides deeper audience insight, layers on top of the IDG TechNework to enable marketers to reach the large tech audience generated by the more than 450 sites in the network.
  • Industry observers say the moves by these ad networks indicate that publishers are growing increasingly savvy and have more opportunities to make the most of their online visitors and to generate scalable audiences beyond those of their own websites.

    “The pendulum is swinging back” toward the publishers and away from third-party networks, said Chuck Richard, VP-lead analyst at research firm Outsell Inc. He added: “We think understanding an audience means money.”

    Historically, publishers have struggled to develop a deep understanding of their online audiences. “In general, b-to-b site owners and b-to-b publishers know less about their audience than the ad networks they work with, than Google, than analytics providers,” said Russell Glass, CEO of Bizo.

    In addition to assisting marketers, Bizo can help publishers expand their knowledge of exactly who is visiting their sites, Glass said. “Most every publisher has Google Analytics on their site,” he said. “It does a good job of telling you what happens on your site, but it's not going to tell you anything about who's doing it.”

    Publishers that offer access to remnant advertising inventory and visitor data earn 60% of what Bizo gets for selling a publisher's audience. Publishers earn a smaller percentage for offering only remnant inventory (40%) or only visitor data (20%).

    Bizo has always emphasized that it strives not to compete with publishers. With its new BAMP offering, however, it may be creeping a little closer to competing with them. Using the product, it can segment audiences more precisely, which is exactly the value proposition b-to-b publishers offer and is what earns them relatively high CPMs.

    For QuadrantOne's Q, the relationship between it and the publishers who came together to create it is less complex. Q's purpose is to cut out the third-party ad network middleman, so Gannett, Hearst, Times Co. and Tribune can generate more revenue from their audiences.

    Ken Doctor, an Outsell analyst, said that with the debut of Q, these giant media companies are essentially saying, “Now, we're going to help our own brands instead of selling against ourselves.”

    By bringing the media companies together, Q seeks to monetize their local audiences through sheer size. “Doing this together, we have a more scalable solution than as individual companies,” said Mario Diez, CEO of QuadrantOne.

    IDG TechNetwork's new Tech Media Exchange also seeks to expand the reach of individual tech websites and blogs, which typically have strong but small audiences. Banded together, these audiences achieve scale and become attractive to large, horizontal buyers.

    Peter Longo, CEO of IDG TechNetwork, said the strategy is working. “We more than doubled our revenue from the first year into the second,” he said of the network. “We expect to see that same growth in 2011.”

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