Ad network use increases six-fold

A new report from the Interactive Advertising Bureau and Bain & Co. has found a six-fold increase in the use of ad networks in 2007, compared to the previous year.

by Helen Leggatt

The use of ad networks to sell excess inventory rose from 5% of total ad impressions in 2006, to 30% in 2007, according to the “Digital Price Benchmarking Study” from the IAB and consulting firm Bain & Co.

The study found that publishers are selling ad inventory via ad networks at rates discounted by up to 90%. Consequently, online publisher revenues grew by 32% in 2007 compared with 2006, and ad network revenues grew by over 50% during the same period.

“Online publishers are producing more inventory than the market demands, and risk devaluing the premium nature of their brands, particularly in light of ad networks growth and their dramatically lower pricing,” said the report’s author John Frelinghuysen, partner in Bain’s global media practice.