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Ad networks here to stay, but consolidation needed to reduce clutter – Part 2

11-February-2010
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Ad networks here to stay, but consolidation needed to reduce clutter – Part 2

In the first part of the report on ‘Ad Networks’, exchange4media had explored the state of ad networks in India and the factors that led to the clutter of ad networks in India. In this second part, we find out how marketers view ad networks, the concerns and the future trends in India.

Ad networks have a wide appeal for publishers and advertisers, in fact, apart from the likes of AdMagnet and Ozone Media, publishers, too, have launched their own ad networks to reduce dependency on individual ad networks. For instance, AdGuru by Guruji.com, LinkedIn Audience Network, an ad network from LinkedIn, and ibibo’s online ad network- adwinks.

A marketer’s point of view

Having a different take altogether, Ajay Kakar, Chief Marketing Officer- Financial Services, Aditya Birla Group, said, “There are many opportunities for a marketer to explore on the Internet and ideally, I would prefer to rely on my agency partner, who solely has my interest at heart and will search the entire network place and tell me what platform is best suited for me. Therefore, before selecting any network to reach out to any particular audience, I will prefer to seek my agency’s advice rather than reach out directly.”

What still matters and what should be done?

Ad networks in India are maturing fast and they are all set to become mainline Internet vehicles in a few years from now, with online video advertising also gaining popularity with FMCG brands. With Internet advertising touching the Rs 1,000-crore mark, ad networks will be commanding a fairly significant portion of the Internet advertising pie.

Anurag Gupta, Managing Director, DGM India, pointed out, “One of the biggest issues facing the networks is the commoditisation of the inventories that they are aggregating. I estimate that currently in terms of value, ad networks will have a 10-15 per cent share of the total digital media spends.”

Amar Goel, Founder and CEO, Komli Media, stated, “Globally, ad networks are important part of media plans and media schedule, and very interesting from an engagement perspective. Secondly, marketers are seeing good results as we are creating very interesting brand solutions and products. Broadband penetration still remains a challenge for the growth of ad networks, but in future, we would love to see many more brands online, and we would like the Internet users to reach the100-million mark, as a result it would lead to marketers exploring and even experimenting more on the digital medium.”

Narayan Murthy Ivaturi, National Sales Manager, Tyroo.com, highlighted, “There is a huge challenge in front of ad networks today, which is transparency. There is a huge perception issue about ad network as well, another challenge remains that the neighbourhood of one’s ad is very important as an advertiser. The more transparent you become to advertisers, the more advantageous it becomes for the ad network and the brand.”

“Although so many networks have coming up, they are very poorly technology oriented. There has to be a real technology orientation of these networks, wherein we should use more and more technology to make the best use of inventory and the demand of the advertiser,” he added.

The way forward

According to Rammohan Sundaram, Founder, CEO & Managing Director, Networkplay.in, “Ad networks will show the way in the Indian Internet space for a lot of powerful dotcom companies outside of the top five when it comes to monetisation. Brand advertising is the way to go on the Internet, and a lot of smart tools, which will rewrite the ROI definition, will take centrestage through technology that will enable the same.”

Gupta affirmed, “Ad networks in India are here to stay and will only see growth in times to come. I would say that the future is very bright.”

On similar lines, Ivaturi said, “Ad networks are here to stay, however, there will be a lot of consolidation in the coming few years, wherein there would be lesser number of ad networks in the market. In future, ad networks will have much larger share of the digital pie and they will be more specialist ad network, as you can’t be ‘me too’ kind of ad network and survive in the market any longer. You have to carve your own niche as to what the offering is and the product one caters to, and I believe, this is the way forward, and we at Tyroo are going the same way, carving our own niche.”

According to industry players, evangelising done by various ad network companies had been one critical factor in the growth of ad networks in India, apart from the low investments and low entry barriers. Experts also believe that a few years down the line, ad networks will not only see an increase in the advertising pie of digital market, but will also see more vertical ad networks catering to niche segments. Another school of thought believes that in few years, the ad networks market will see consolidation, which would result is lesser number of ad networks than what we see today.

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