The Rise of Ad Networks | Buying Into an Ad Network

In a 2007 report by JPMorgan called, “The Rise of Ad Networks: An In-Depth Look at Ad Networks,” analyzed ad development in four major networks and drew predictions on trends they saw then.  Seven years later, their predictions and report are reflected in today’s advertisement trends. The four major ad networks analyzed were AOL, Google, MSN, and Yahoo. The group of analyst and researchers who worked on the report concluded the following;

1. “The Audience Is Fragmenting”

What they saw happening then is still happening today. It is true that the market have fragmented. Certain applications have been able to seize those fragmented market. Google AdWords is a good example of this trend. The application captured a particular fragment of the market. The report continues to say “portals which embrace fragmentation will succeed,” and Google continues to be ahead compared to all the other three networks that were part of the report.

2. “Page Views Are Meaningless”

Data is one of the most useful pieces of information gathered from marketing and advertisement. Most major networks and applications now collect information about every move and activity a user makes. The data then helps the networks and marketers develop more applicable ads tailored to the users needs.

3. The Ad Network is $2B+ and growing

TechCrunch reported that digital ads take up 22% of all U.S. ads as of late 2013 and have brought in over $109.7 billion in revenue. An additional $33.1 billion is expected for the Internet ad expenditure in 2015.

4. Consolidation is Key

Consolidation benefits large companies for the purpose of cost synergy. For example Google has grown to offer a range of broad and deep services and tools for users. They are able to diversify and specialize in niche markets.

5. Google, AOL, MSN and Yahoo Increasing Focus

At the time the report was released, AOL was the largest ad network. Now Google is known as the king that sits at the throne of ad networks. All four have greatly grown in the past 7 years.

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