Ad Networks increasing prominence

BusinessWeek discusses Ad Networks and their pricing in a recent article:

http://www.businessweek.com/magazine/content/09_09/b4121048726676.htm

We have discussed Ad Networks in class a few times, and I found this statistic a good measure of the shift in advertising buying:

Several industry sources estimate that, out of the $8 billion advertisers spent on display ads last year, 70% went directly to Web sites and 30% to ad networks. This year, based on spending shifts in the past month or so, they project the mix could move to 50-50.

The more advertisers shift towards cheaper ads the more this will devalue the price of existing inventory. So for example the CPM for ESPN might be $40, but using an ad network could only cost $2 CPM. The article does not go into enough depth discussing the differences in both environment and success of brand sites vs. ad networks. There is the possibility more websites will withold inventory from Ad Networks in hopes of driving advertisers away from them, however, a significant assortment of high quality websites would have to pursue this strategy to have any impact. On the other hand it is possible ad networks will grow even stronger as their reach and targeting abilities grow.