An interesting article in today's WSJ (http://online.wsj.com/article_print/SB120830611037017935.html) discussed how a website called SOAPnet.com, a subsidiary of Walt Disney Co., recently converted its business model to one of an ad network because decreasing web traffic and a need to generate alternative sources of revenue. But what's more interesting is the article's discussion of how the ad network industry is becoming more and more crowded, which has the effect of simply driving down average revenues and effectiveness of sales.
Because of the great proliferation of different ad networks, its becoming more difficult to web marketers to decide how to spend their ad dollars in the most effective and efficient way. This is because ad networks employ different technologies and cater to certain demographics (or alternatively, they employ many different technologies and many different demographics, which presents a challenge in and of itself). "...now the ad-network population consists of so many permutations and combinations of services and expertise that media buyers, who often control ad spending for marketers, are left scratching their heads."
I agree with most experts who say that the industry is ripe for consolidation. In fact, we've already seen some of this activity. Microsoft, AOL, and Google have been snapping up small, specialty ad networks that can enhance each of their growing ad-based empires. In addition, we should anticipate a number of smaller ad network players, who haven't really carved out a niche or value proposition, stumbling out of the industry due to lack of marketer dollars flowing their way.
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