I have been saying for month’s current ad models, especially display advertising networks are in trouble. There are many reasons I feel this way but they all boil down to one - the ad performance is poor. In other words it is a “spray & pray” approach, which provides little value to the advertiser and even less to the consumer.
I recently read an article today about how ESPN, which is a very large on-line advertiser, is pulling the plug on it’s ad network relationships. Here is the article:
With nearly every media company getting in the ad network game—the latest entrant being Forbes—one major player is bucking the trend. ESPN (NYSE: DIS) has ended its arrangement with Specific Media and several other unidentified ad nets, Mediaweek reports. The Disney sports franchise says that it wants to head down “a different path.” While the direction of its new path isn’t clear, the reasoning behind ESPN’s change of heart toward ad nets is: the use of ad nets diminishes the value of their brand and content by spreading it so widely, ultimately threatening existing relationships with advertisers. All the while, the networks gain from media companies’ brand investments and their user data, providing little else in return.
But in order to reduce the competitive power of ad networks as it chooses its new path without them, ESPN will have to convince other major web publishers to do the same, Adam Kasper, SVP-director of digital media, for MPG’s Media Contacts, tells Mediaweek. Turner, for one, is said to be ready to turn away from the ad network model, though the company says that no action is imminent and it constantly reviews its media practices.
– Treating ads like pork bellies: At last month’s Interactive Advertising Bureau annual meeting, incoming chair Wenda Harris Millard warned that media companies were selling web inventory like “pork bellies.” Explaining her remark to Mediaweek, Millard, president of media for Martha Stewart Living Omnimedia (NYSE: MSO), says she’s become concerned about “the commoditization of brand inventory by some of the networks.” While ad networks started receiving attention when major publishers realized they had a difficult time selling their remnant, unsold ad inventory - the wide range of avails that go unsold at a given time can run from 20- to 70 percent of a site’s inventory - some are starting to rethink whether relying on automated ad selling across dozens of sites is the best way to go.
