Q&A: Are There Too Many Ad Networks?

This week, I’ll be asking  some of the big questions I have about the advertising industry to people who have skin in the game.

BNET: Can the market bear so many online ad networks, or is there a round of consolidation coming?

Dave Martin, Vice President of Interactive Media, Ignite: There will no doubt be consolidation in the ad network market. Free advertising exchanges will empower advertisers to create and administer campaigns without having to pay margin to ad networks. Only the best will survive and they will likely become part of larger media companies who can compliment their offerings with cost-effective reach.

George H. Simpson, President, George H. Simpson Communications: The challenge to that question is the tendency to lump all ad networks together when in fact vertical ad nets (Jumpstart, NetShelter, Travel Ad Network) are VERY difference from big mass reach ad nets (like Adv.com or Valueclick) which are in turn different from behavioral and the newly emerging semantic targeting networks. Newer still are ad networks that target based on relationships established and nourished in the social graph. In short, there are too many ad networks and with ad exchanges and new launched companies like AdMeld  optimizing nets against the highest price paid to publishers, there is no way you won’t see consolidation and failures. Ad network Burst, gone public in the UK, is trading at an historical low.

Michael Sprouse, CMO of Epic Advertising: Some industry sources have issued a statistic that there are hundreds of ad networks, maybe even more than 300, of varying types. The market itself can bear it, since there is clearly demand right now which I don’t see diminishing. But I think it’s foolish to think there won’t be at least some consolidation, contraction or other jockeying in the space soon.