The growth of online media in Asia has inspired a great deal of
debate and confusion in the media industry with regards to the role of
ad networks.
To understand the debate one should first grasp the current and
potential size of the market in which ad networks in Asia operate.
The Internet market in Asia has demonstrated remarkable growth in the
past 12 months, and promises explosive growth in the coming few years,
both in terms of user numbers and ad revenue.
According to Goldman Sachs investment research, in 1998, Asia had almost
15 million Internet users and grew to close to 20 million in 1999. This
is predicted to continue to grow 40 per cent annually, to reach 64
million users by 2003.
According to Merrill Lynch, 1998 online adspend in Asia (ex-Japan)
reached US$30 million, a figure that hit US$74 million in
1999.
The same report estimates the market to surge to US$169 million
this year and reach a staggering US$1.25 billion by 2005.
Clearly, the Internet will grow to such a size that ad agencies can only
ignore it at their own loss.
It is in this context, one begins to understand why the online ad market
and ad networks are creating such interest and debate.
The question is how to access ad networks. As a media format, the
Internet is unique in that it is truly border-less and barrier-less.
As with the Internet itself, ad networks originally evolved in the USA,
where there are now literally hundreds of thousands of online sites, far
beyond the capability of any ad agency's media department to adequately
cover.
Conversely, it has proven impossible for online publishers to build ad
sales forces capable of promoting their product to their full potential
market - hence the birth of the ad network.
Although the same problems faced in the US by Web publishers and
advertisers are apparent in Asia, this region is a very different
market.
The broad range of geographic, economic, cultural and language
differences from country to country make online media planning in Asia a
very complex and strategic process.
Patchy and uneven planning, as well as a lack of familiarity with the
Internet medium, has meant that the relative strengths of many
well-known brands in traditional media have not necessarily translated
those strengths online.
Addressing these complexities, the role of ad networks is to simplify
every step of online campaigns, from the initial assistance in research
and planning of campaigns, through to the strategic execution and
management of the campaign.
The ad network should combine two major functions, firstly, as a media
rep and, secondly, as a technology supplier.
The technology investment and specialisation that ad networks provide
means that the potentially huge task of online buying and campaign
management is greatly consolidated and simplified, saving time, money
and the large staff numbers required for an agency to attempt this work
in-house.
Technology is also a large factor in online campaigns, watching and
collecting information as the campaign runs and then using that
information to improve results going forward is one thing that the
network can offer over and above direct buying.
The ad network seeks to streamline the offering by filling the role of a
multi-site promoter, all managed with a common ad-server.
As an ad network can represent literally hundreds of sites covering a
diverse range of content and vertical interests, ideally, part of its
service is to analyse the synergies between the network's range of sites
and then build up a map of demographic and content groupings.
The huge range of options available requires dedicated, specialist
analysis.
The Internet is about speed. Things on the Internet change constantly;
being on top of the best sites to use is more than the job of a
department within an agency - it requires an entire specialist
company.
The Internet should not be treated as a separate media, but part of a
fully integrated media plan.
In essence, the ad network is a mediator or broker, fitting between the
opportunities of the Internet and the ad agency media planner. This
service allows the media planner to build truly integrated campaigns
with TV, print, outdoor and online.
To clarify any misconception, the ad network is not an ad agency and
should not act or promote itself as one. The roll of the ad network is
as a specialist strategy consultant that has the ability to execute a
campaign.
To fulfil its role to its fullest, the ad network should be a specialist
advisor, independent and impartial in its relationship with both
agencies and the media owners.
As with all brokers and consultants, the main reason for this being
professional objectivity.
The ad agency is tasked with serving its clients by looking at the
collection of media options presented, and building the best campaign
possible, the ad network's role is to empower the agency to better
fulfil that role.
