by: Josh Hawkins
Mollie Spilman, CMO of Advertising.com, has an article at iMedia extolling the benefits of advertising networks for marketers who are trying to achieve reach objectives.
The argument goes that there are limited avails for placements at major brand-name portals, which drives up CPM rates and, I would add, often constricts the schedule for promotions. This holds especially true for broadband video advertising which is still in a nascent stage with regard to inventory compared to exploding consumer demand (90 percent of all households will have broadband Internet access by 2008, eMarketer).
Networks, on the other hand, provide a one stop shop for ad insertions that span a large number of contextually relevant properties. In essence, a network aggregates niche demand and search behavior. Therefore, with a single ad insertion, you can effectively cover entire genres of online content, which have their own niche audiences and communities. Instead of mega media buys at the most popular online destinations, broadband video ad networks - for the most part - force contextual sensitivity and micro marketing. At the same time, this micro-level targeting can yield significant reach through network aggregation - reach at a significantly lower CPM.
What I like most about this seemingly commonsensical statement is that it turns the most typical reach tactics on their heads. And, as an approach, it's extremely practical for all parties involved. Since niche properties could never, on their own, participate in meaningful broadband video advertising campaigns, they join networks. The aggregation of traffic and eyeballs provides a compelling platform for advertisers to fine tune their message for niche audiences, while at the same time reaching a very broad sampling of consumers.
I would argue that this is only half of the real value proposition that broadband advertising networks provide. The other is, of course, engagement. While the term itself - as it's used in marketing speak - is the subject of some debate, it's undeniable that relevant brand messages placed in niche online content result in more forward-leaning brand experiences. A Gallup study released yesterday showcases how "niche communities...speak the loudest to the topic of consumer engagement." (Reported in AdAge).
Advertisers get this, as do publishers. Even some of the major brand-name portals are splintering to offer marketers micro-targeting opportunities. A few months ago, following their partnership with Current TV, Yahoo announced that it would begin launching a series of special landing pages / micro sites starting with http://food.yahoo.com/. And MTV recently announced a new initiative to launch 20 "hyper programmed experiences," i.e., micro/vertical content categories. The most important rationale for the Yahoo/MTV micro marketing strategy is that it provides advertisers a context for reaching forward-leaning audiences. (Not to mention the fact that it provides a perfect platform for product placement and the burgeoning trend in "advertainment").
I would bet money that Yahoo/MTV will opt unsold inventory into ad networks to give marketers an opportunity to reach niche audiences at a lower CPM, while at the same time aggregating eyeballs across a large number of contextually relevant online properties.