Ad Networks Are Transforming Online Advertising
Forget the lingering hopes that online advertising would remain a beacon of stability in this economy. In recent weeks major Web publishers, from Yahoo! (YHOO) to New York Times Co. (NYT) , have reported that revenues from their mainstay pictorial display ads are down.
The poor economy isn’t their only problem either. It’s simply speeding up a shift in online advertising that’s challenging the Net’s leading destinations like never before.
The chief culprits: middlemen called advertising networks. They serve as brokers between advertisers and Web publishers, connecting sites that want to sell ad space with advertisers and agencies that want to reach potential customers.
The networks stitch together ad space from many small Web sites as well as from the less visited pages of large sites that otherwise go unsold. Through the networks, advertisers can reach audiences comparable in size to those at the largest Web sites. And they often do so at a fraction of the cost of ads on major sites’ most prominent pages.
As a result, the networks, which range from publicly held ValueClick and Time Warner’s (TWX) Advertising.com to hundreds of obscure outfits, are grabbing a greater share of online advertising dollars.
Extracted from: Business Week. Click here to read full article.
