Vertical Ad Networks: A Trend to Watch for 2008

I talked about Audience Fragmentation and the Rise of Ad Networks recently. At the moment, the Ad Networks are in the business of amassing large volumes of fragmented traffic, and offering a channel to advertisers to access the publishers who own this traffic.

Expect, in 2008, a trend towards these “mass” Ad Networks gradually becoming of higher quality via segmentation and “verticalization”.

The reality is that old media has started waking up and realizing that Google, Yahoo, AOL and a bunch of upstarts are eating their lunch, even though THEY are the ones sitting with the best advertiser relationships and ad sales forces.

The first of the old media companies to experiment with this phenomenon was Washington Post, through its Blogroll program. Now, if you are a blogger, you are likely to have been approached by many other burgeoning ad networks … Reuters, CNet, NYT, Forbes, Dow Jones … several are noodling entry paths into this business of aggregating fragmented traffic, and selling it to advertisers for a premium.

I started predicting that this would happen back in April 2007, when I interviewed Russ Fradin of Adify. It is, in fact, surprising to me that the Newspaper and Magazine world has taken so long to grasp the opportunity.

This trend, also, as you have heard me say before, is going to be the death nail for Google’s AdSense, because AdSense has really mistreated its small publisher customers.

Now, the old media players won’t have their act together right away. They have some learning and some experimentation to go through over the next 6-9 months. However, by the end of 2008, my prediction is that the vertical ad networks coming out of the shops of veteran media companies should be able to deliver CPMs that will be at a significantly higher level than that offered by Google AdSense, Yahoo Publishers Network, Advertising.com, Blue Lithium, etc.

And that is precisely what we, publishers, are waiting for.

Would Google sit around sucking its thumb, meanwhile? I sure hope not.

At the end of the day, the market is better served when fierce competition drives all players to raise the bar on their offerings. Google, for the longest time, has had an open playing field with nominal competition.

I, for one, can’t wait to see that dynamic change.

I, for a change, am rooting for the old media companies to get their acts together!

This segment is a part in the series : Vertical Ad Networks