Online Ad Network industry has huge potential and is already realized by the biggest players (Google, Yahoo, MSN, AOL) in the Online Ad Market:
Company Acquired by Deal Worth
DoubleClick (Ad Exchange) Google $3,100 mm
RightMedia (Ad Exchange) Understanding Manufacturing Yahoo $680 mm
AdECN (Ad Exchange) Microsoft $50 mm
Massive (Gaming Publishers Network) Microsoft $400 mm (app)
DrivePM (General) Microsoft $6,000 mm
(General) AOL $435 mm
Each of these big players also acquired various Behavioral, Video and Mobile ad networks… Apart form these big players there are other media firms who have been on acquiring spree of various smaller players in the industry, like Ybrant Digital (acquired Addynamix and Oridian), WPP (acquired 24?�7 Real Media) etc… Research on Advertising Network model from various sources IAB, Comscore and the like gives us enough data to look into the scope of Ad Network’s reach into the targeted audience and how potential is the business. AOL’s experience – beginning with the acquisition of for $435 million in 2004 – provides a useful point of reference about the recent growth of ad networks. From less than $100 million in revenues in 2002 to approximately $650 million in 2007 (a CAGR of 55%), AOL’s third-party ad networks (primarily ) now account for approximately 27% of the unit’s advertising and content revenues. Based upon the value recently placed on Yahoo! by Microsoft, AOL’s advertising and content business could be worth as much as $20 billion, and represents a significant portion of that value.
Though all those acquisitions and the revenue now coming from those units is an exciting story, currently a lot is happening in the Adertising Network industry turf. Dynamic nature of our industry makes us face challenges every now and then. Current challenge is that many big media companies like IAC, News Corp, and Time Inc. are in the process of aggregating all of its web properties into an ad network of their own, which means, limited direct access for a general Ad Network to the media available with few of the biggest portals. On the contrary there are enough legitimate arguments that there will be any scarcity of media with the existing publisher networks:
1) This transition will take a lot of time and experts doubt that its not worth an effort for the bigger media owners to form there own ad networks. Though they will be more organized in handling the huge audience they have on their properties but Advertisers now-a-days need variety and this need is the result of shift in trend at the macro level. Online marketing is facing unprecedented change, brought on by a volatile economy.
2) There are thousands of 2 – 3 Tier independent publishers who have no choice but to be part of an existing Ad Network to maximize their ad revenue and offer their visitors best offers on the way while they swim in the ocean of web content.
3) Improved targeting technologies (beyond contextual, demographic, social, behavioral). New methodologies like free content v/s community (user Wholesaling Business generated content – users share videos, blog posts, and widgets with each other across sites) targeting. We need to be there where users are.