Ad Network Study Executive Summary
This year marks the 3rd annual Ad Network Study managed by
Collective Media and the first year that it has been conducted by
Sterling Research Group, Inc., an independent market research
firm. The purpose of this tracking study is to gain valuable insight
into the ad network space and trends in the online advertising
marketplace. This tracking study continues to provide ad networks
Authors: as a whole clarity of the industry to better serve clients and offer
the industry relevant data on how buying and selling online media
CEO, Collective Media Online ad revenue in the U.S. surpassed $23 billion in 2008,
reaching a record high and posting the 5th consecutive year of
Veronica Mathieson record results, according to the Interactive Advertising Bureau’s
Vice President of Marketing, 2008 Internet Advertising Revenue Report. This amount represents
Collective Media approximately a 10.6% increase over 2007. The report shows
display advertising accounted for $7.6 billion or 33% of total
Amenan Kouadio revenue. Display ad revenue saw an overall increase of 8% over
Market Research Coordinator, 2007. While many of the other media sectors are showing
Collective Media weakness for the period, Internet display advertising is showing
strength as online programs continue to expand.
Senior Account Manager, Ad networks continue to be a viable solution for agencies and
Sterling Research Group, Inc. advertisers to specifically target and reach their intended markets
with the utmost efficiency. Other highlights include:
• Continuing Growth in Brand Advertising: More than 50
percent of respondents continue to work with ad networks for
both their branding and direct marketing plans. At the same
time, there was a statistically significant decrease between
2007 to 2009 in the percentage of those using ad networks for
only direct marketing plans – which correlates to an increase of
marketers using networks strictly for branding purposes.
• Short List of Ad Network Partners: Most agencies and
advertisers appear to have established a limited number of
trusted ad network partners. Over 70 percent of respondents
surveyed work with only one or two ad networks on an average
• Ad Exchanges Won’t Replace Ad Networks: Although 4.5%
more agencies and advertisers said they worked with ad
exchanges than those surveyed in 2008, these respondents
remain in the minority. Most respondents (85%) did not work
with exchanges, and only 7 percent believe exchanges will
replace ad networks.
Close to 500 online surveys were completed this year by online
media decision makers including advertisers and agencies as well
as publishers holding inventory. The following results are among
417 agency and advertiser respondents representing a 4.5% margin
of error calculated on a 95% confidence interval. Surveys were
completed between February 17th and March 6th, 2009. Most of the
questions were multiple choice, many with a space for open-ended
answers, providing deeper understanding of what is driving growth
in this space.
Results and Key Findings
More respondents plan to work with ad networks in 2009 than did in 2008. In 2008
84% of respondents did work with networks where 89% plan to this year (see Figs. 1 and
A little more than 70% of agencies and advertisers use one or two ad networks on an
average media plan, and 29% work with three or more ad networks. This has changed
slightly over last year’s results where nearly 75% of respondents used one or two ad
networks for an average media plan and approximately 25% used three or more (see Fig.
3). This finding is in line with Rubicon’s 2008 Online Advertising Market Report that
found 70% of the time a combination of networks outperform one, based on different
technology capabilities and advertiser relationships.
A larger percentage of respondents this year thought there were too many ad networks
(see Fig. 4). Over the past two years, this statistic was relatively stable, but increased
significantly in 2009. Based on articles in The New York Times and research conducted
by comScore, there was an expectation last year that agencies and advertisers may
begin to feel there were too many ad networks due to noted growth in early 2008. This
expectation is now a reality based on the survey results.
2009 Ad Network Study Page 2 of 12
More than 50% of respondents continue to work with ad networks for both their
branding and direct marketing plans. Alone, 20% of agencies and advertisers use ad
networks for direct marketing efforts and 23% use them for branding only, a slight
increase over 2008. Combining these categories with those who use both, shows fully
96% of agencies and advertisers work with ad networks for their branding, direct
marketing or both (see Fig. 5).
There was a statistically significant decrease in the percentage of agencies and
advertisers using ad networks just for their direct marketing plans from 2007 to 2009.
It can be assumed this decrease correlates to the increase of marketers using networks
strictly for branding purposes. We can expect this trend to continue as more brand
advertisers utilize networks in media plans. Conversely, there was a significant
decrease in agencies and advertisers not using ad networks for any of these plans,
showing the use of networks increasing across the board.
Increasingly, agencies and advertisers are using a variety of ad unit types with in-page
ads being strongest, followed by sponsorship, home page takeover ads, in-stream video
and synched ads/road blocks. The percentage of respondents buying in-stream and
sponsorship ad units was up significantly in 2009 (see Fig. 6).
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Targeting continues to be a key component of ad network media buys and has
significantly increased since 2007. Demographic and behavioral targeting
methodologies continue to be the most widely used followed by contextual, geographic,
channel and re-targeting. Re-targeting has increased significantly since 2007 (see Fig.
7). Site re-targeting based on web-pages visited is the most common type of re-targeting
used and increased significantly in 2009 (see Fig. 8). Ad re-targeting showed a
significant decline in 2009.
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This year, several questions related to in-stream video ad formats were added to the Ad
Network Survey to learn more about this increasingly popular format. Of the
respondents who will buy in-stream video ads, 69% will buy pre-roll formats (see Fig. 9)
Of the respondents who will buy in-stream video ads, more than one third place up to
10% of their buys with ad networks (see Fig. 9b).
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Efficiency continues to be the number one reason why agencies and advertisers use ad
networks (see Fig. 10). This year, there was a significant increase from 2007 in the
percentage of respondents selecting reach and targeting. The dramatic increase from
targeting as a primary reason for ad network use illustrates the recent trend of
marketers adopting audience centric buying practices versus purchasing site specific.
High percentages in the top three categories indicate multiple reasons why ad networks
are used and follow prior years’ trends. (Note: more than one answer was allowed in
2007 and 2009, but in 2008 this question permitted only one answer.)
While audience duplication remains a concern about working with ad networks,
respondents this year noted lack of site transparency, control and editorial quality as
their top reasons for limiting usage of ad networks, showing that marketers, especially
brand advertisers who are using ad networks more frequently, do place value on
transparent third party partners and high quality environments for their brands(see Fig.
11).Alternatively, there was a significant decline in the percentage of respondents citing
client policy and other reasons for limiting ad network usage.
User-generated video continues to be the most unpopular advertising environment
among agencies and advertisers (see Fig. 12). However, fewer respondents expressed
clients’ refusal to run on user-generated content this year than last. This is most likely
2009 Ad Network Study Page 6 of 12
attributed to the increase in consumption of UGC by consumers today. Marketers are
following this development and seem to be more willing to advertise where their target
is spending time online. The “Other” category was added this year providing additional
insight into which types of content is restricted for advertising. Of the 23% of
respondents indicating other content sites, one-quarter of these respondents noted
adult content sites having content on which they do not advertise. Surprisingly, another
one-quarter of the “Other” category indicated their clients do not restrict online
advertising based on site content.
The best differentiators of ad networks are inventory quality, reliable targeting and
transparency (see Fig 13). Although considered less of a differentiator, price was
mentioned by a significantly larger percent of respondents in 2009 when compared to
2008, which most likely relates to the current economic climate. (2007 results not
reflected in chart because this question allowed for multiple answers that year. Price,
optimization and reach were considered high differentiators in 2007. This is no longer
the case as market conditions have changed).
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About three-quarters of respondents plan to use vertical ad networks (see Fig. 14). This
represents a decline from last year’s response rate of 83%. One-quarter of respondents
plan to use vertical ad networks less in 2009, a significant increase from 17% last year.
Portals (75%) and specific publishers (60%) continue to be the most viable alternatives to
ad networks (see Fig. 15). Affiliated marketing programs and ad exchanges are not
considered strong alternatives to ad networks. With ad networks also offering efficiency,
targeting and optimization, they seem to offer a competitive advantage over portals.
Paid search received a significant response (47%) as an alternative to ad networks. This
is a dramatic decrease from 2007 but shows that marketers still find some value in the
performance-based model of paid search.
2009 Ad Network Study Page 8 of 12
In 2009, 4.5% more agencies and advertisers said they worked with ad exchanges than
those answering the same question last year (see Fig. 16). The percentage of
respondents not using ad exchanges continues to be high as brand advertisers work
closely with high quality ad networks, portals and publishers. In addition, an
overwhelming majority of respondents thought ad networks would not be replaced by
ad exchanges (see Fig. 17).
Targeting remains the primary reason for working with specific publishers, and custom
sponsorships are beginning to show signs of growth (see Fig. 18). (2007 results not
reflected in chart because this question allowed for multiple answers that year. Reach
was the top reason cited in 2007).
2009 Ad Network Study Page 9 of 12
When buying online media using portals, reach is by far the primary reason (see Fig.
19). Targeting and efficiency play a much smaller role in why portals are used. (2007
results not reflected in chart because this question allowed for multiple answers that
year. Reach was the top reason cited).
Many respondents expect to increase their online advertising and ad network spending
in 2009. A little more than 50% of online media buyers expect to spend up to 15% of
their overall budget with ad networks (see Fig.20).
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• Ad networks continue to be adopted by more direct marketers and brand
• A majority of agencies and advertisers believe ad networks are safe for brand
• Premium and vertical ad networks are providing higher inventory quality, more
reliable targeting and greater site transparency.
• Efficiency and reach are the most important reasons to work with ad networks, and
true differentiators are most often seen as inventory quality and targeting.
• Re-targeting and channel targeting are the fastest growing targeting types used by
agencies and advertisers.
• Ad exchanges are used very little by agencies and advertisers and are not expected
to replace ad networks.
• Results of the overall perspective of ad networks held steady in 2009 from 2008.
• Agencies and advertisers will work with more ad networks over in 2009, and limit
their usage to one or two ad networks.
• Many agencies and advertisers plan to spend more with ad networks in 2009 than
they did in 2008.
• To become the one or two ad networks agencies and advertisers will work with on
an average media plan, ad networks should continue to offer high efficiency, broad
reach, specific targeting and optimization. In addition, ad networks should do
whatever they can to overcome the primary reasons why agencies and advertisers
limit their usage of ad networks (lack of site transparency, control and editorial
The Collective Media 2009 Ad Network Survey was conducted by Sterling Research
Group, Inc. This online survey was fielded between February 17, 2009 and March 6,
2009. Collective Media provided the database of interactive decision makers.
Almost 500 respondents completed the survey, with more than 400 identifying
themselves as an agency or advertiser. Each respondent received a $10 iTunes gift card.
These respondents were automatically entered into a drawing to win the Grand Prize, a
About Collective Media
Collective Media’s media and technology solutions serve online publishers, agencies
and advertisers. Collective’s product suite includes the Collective Network™, the
largest premium display advertising network, the Directive Network™, the only
transparent performance advertising network, AMP®, its proprietary ad network
management platform and Personifi®, the leading semantic content classification
and audience targeting solution. Founded in 2005, Collective Media is a member of
the Network Advertising Initiative (NAI) and is headquartered in New York City with
offices in Boston, Chicago, Dallas, Detroit, Los Angeles and San Francisco. Visit
Collective Media at www.collective.com.
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About Sterling Research Group, Inc.
Sterling Research Group, Inc. is a full-service consulting and market research firm
headquartered in St. Petersburg, Florida. Sterling is a leading customer experience
management company in the service industries and deploys a highly-effective,
proprietary research and reporting technology that enables its clients to achieve
superior financial returns by better understanding their customers’ experience. Visit
Sterling Research at www.sterlingresearchgroup.com.
Sterling was founded in 1987 by several marketing professors from the University of
South Florida. One of the founding principles of the company was to bring the use of
state-of-the-art technology to market research. Sterling started with document scanning
when almost all other companies were still using key data entry. Today, Sterling
continues to lead the industry in the use of technology to make market research more
accurate, less costly, and highly actionable. Our focus is on providing tracking
programs and management tools to service industries with many of our projects
focusing on longitudinal customer satisfaction tracking and performance improvement
Sterling is committed to methodologically rigorous market research. We partner with
organizations to help them meet financial objectives through measuring and
understanding their customers’ opinions. Today we conduct over 180,000 customer
“touches” per week through mailed surveys, web-based surveys, and IVR (“integrated
voice response”) phone call surveys.
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