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Getting the Right Ad Play -- without the Portals Ad networks like DoubleClick can deliver a wide variety of Web audiences to advertisers, sometimes more cheaply than the leading portals A major draw of the portals, such as Yahoo! and Excite, is that they offer one-stop shopping for advertisers. Through a broad array of content -- from financial news to health information -- they reach a wide audience. Because of that, advertisers can turn to a portal and do one relatively quick deal, rather than running around to, say, women's sites, techie hangouts, and financial-services sites. That's a pretty compelling offer. But guess what: There are companies, called ad networks, that offer a similar service, providing an interesting -- and sometimes cheaper -- alternative to the traditional portals. Advertisers should check out them out. These networks serve up ads for advertisers across a number of sites around the Web. New York-based DoubleClick Inc., for instance, delivers ads to 1,500 sites, including Dilbert and search engine AltaVista, while 24/7 Media Inc., also in New York, has agreements with 225 Web-site operators. TAILORED CAMPAIGNS. Here's how the services work. DoubleClick has 321 salespeople, while 24/7 has an 80-person sales force that acts as the contact for companies and ad agencies that want to place ads online. The sales folks make calls to companies and agencies. Once an advertiser decides to use one of the ad networks, the marketing campaigns can be tailored to a specific audience and either run across an entire network or across a group of targeted sites -- financial or automotive, for example. "If I can get the right message in front of the right person at the right time, that's the media planner's dream. And because they have such wide choice of sites, there are some sites we might not have known existed," says Sharon Katz, group media director at Modem Media.Poppe Tyson, an agency that uses ad networks and handles online advertising for companies, including AT&T and Citibank. Indeed, the networks play on the fragmented nature of the Web, and that's where they become portal-like. A little history: The services grew out of software from companies like NetGravity that are used by a site to deliver its own ads. The advantages of offering a service that would let advertisers market a group of sites became obvious. DoubleClick's founders, for instance, initially toyed with aggregating a network of content sites and charging a subscription for them -- a notion they dubbed an America Online-killer. But they dropped that idea in favor of pulling together a group of sites. The ad network idea has paid off: DoubleClick is the ad network leader with a market cap of almost $4 billion. Ranked 65th in the Business Week Information Technology 100, the company had revenues of $31.1 millon in the first quarter, up 139% from the same quarter a year ago, though it is still unprofitable with a loss of $5.28 million.
Targeted and direct marketing is becoming a bigger focus for the ad networks. What the ad networks have to offer is the ability to track which ads are working best on which sites. They can then remove ads on sites that aren't effective, while putting more ads on the spots that are getting better responses. Or they can help advertisers redesign their promotions so that more people click on them and make purchases. "The real answer if you're a Web retailer is to allocate a small portion of your marketing budget for branding on the portals, but then spend the rest on direct marketing," says Jae Kim, an analyst at Kagan & Associates.
The ad networks, however, do face the same problem as other sites that sell advertising online: lower click-throughs as people become more immune to ads. In fact, the percentage of people who click on Web banner ads has dwindled to less than .5% from as high as 2% last year, estimates Forrester Research. That's why concentrating on direct-marketing services is important for the ad networks. DoubleClick, for example, is amassing profiles on people -- gender, where they live, and their Web viewing habits. Because the ad networks can track this over a wide group of sites, that gives them an opportunity to have a better understanding of how people react to ads. That's what advertising online is all about -- tracking and adapting on the fly. So check it out.
Heather Green covers the Internet and E-commerce for Business Week in New York _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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 Heather Green covers the Internet and E-commerce for Business Week RELATED ITEMS Sites mentioned in this column: DoubleClick 24/7 Media News about Web advertising: "AdForce Is Working Overtime to Secure Its Net Future" | ||||||||||||
