Ride the net's long tail through tough times

On iMediaConnection:

The key to ad buying in a recession is to spend efficiently. Here's how vertical ad networks can help make that happen.


These past few weeks there has been a lot of talk about the changes happening with the world's financial markets. In January 2008, the NASDAQ bounced around, falling 317 points (12 percent), and even the venerable Google, the bellwether of online advertising stocks, fell from 685 to 584, an almost 15 percent loss. Tuning in to the evening news, you can hear talk of the R word (recession), and Google Zeitgeist reports a huge jump in that term's search popularity in 2008.


Of course it's still very early to say what will happen to the global economy, and we probably won't know that we're in a real recession until we've been in one for several months, but this current financial situation actually offers great opportunities for savvy advertisers. Compared to previous recessions, the key difference today is the opportunity to leverage the long tail of the internet to maximize the impact of advertising campaigns and reach target customers who spend more and more time on more and more sites.


More on iMediaConnection.

Ad Mark Tech - Adify will satify and gratify

Michael Katz, the author of Ad Mark Tech, captured the gist of what makes Adify interesting and compelling.

From his blog...


...Two and a half years ago Adify recognized that there was a tremendous adoption of the internet by every day users. In addition a huge volume of the audience of advertisers wanted to broaden their online reading. As a consequence, advertising dollars began to move online at a very fast pace. Media companies that had existing relationships with solid advertisers were running out of inventory due to demand for editorially based advertising. Basically there were more advertising dollars than there was premium advertising space. At this time, Adify spotted that every major media company would have this problem....


For more - please visit AdMarkTech.com

Enough Already - Figure out the difference between performance and vertical ad networks

In the last couple of days, very smart reporters have written articles deploring the proliferation of ad networks in light of announcements from Forbes and ABC SOAPNet and others. The problem isn't the proliferation of ad networks, but rather the proliferation of web sites and the audience tendency to spend more than 60% of our time on smaller sites that address specific interests we have at that moment. Performance ad networks have existed since the mid-1990s to aggregate together unsold, remnant inventory from large sites into packages that delivered incredible reach for direct response advertisers. There are many of them and media buyers have to decide which combination of inventory and technology will meet their direct response needs.


Vertical ad networks are another entity entirely because they are composed of unique, high quality inventory that is cultivated, reviewed and enhanced through alliances with major media companies or very focused, savvy entrepreneurs. For the media buyer, this is an exact answer to the fragmentation and proliferation problem. Trusted editors are affiliating their brand with high quality content that attracts complimentary audiences that media buyers can access through trusted, long-term sales relationships. Determining which Vertical Ad Network to work with is easy - what audience do you want to reach? Which major sites reach that audience? Do they have extended reach with mid- and long-tail sites? Or do you know a specialist who has unique, high quality inventory reaching that audience?


All ad networks are an answer to the ever expanding growth in number of web sites. Vertical ad networks do the expensive work of finding the highest quality web sites focused on very specific audiences and then building a community that shares traffic, content and revenue in order to deliver that audience efficiently to premium advertisers. There will be "enough already" when new web sites stop emerging on the web. Until then - welcome the Vertical Ad Networks and insist that they live up to their value proposition of cultivating and binding unique, high quality content that attracts a common and valued audience.

Lehman Research Looks to the Future of Online Advertising

In its latest equity research report, the investment bank Lehman Brothers has identified “what is becoming an increasingly important component of the online advertising value chain – vertical advertising networks.”


The independently-commissioned report, written by Lehman Brothers Senior Research Analyst Douglas Anmuth, views vertical ad networks as “a natural evolution driven by the fragmentation of the Internet”. The change, according to Anmuth, is being motivated by growing advertiser demand for specific audiences rather than mass reach. Because advertisers are willing to pay a premium to reach these specific audiences, Anmuth predicts that vertical ad networks “are well positioned to take a larger share of the online advertising market.”


Supporting this prediction are recent statistical trends. Anmuth notes that, during 2007, the vertical category grew by 43% to reach a 39% share of overall advertiser billings. Contrastingly, the portal category’s growth was negative, slipping 5% to end at a 19% share of overall advertiser billings.


Why are portals losing market share to verticals? The reason has to do with media fragmentation, and the challenge that it presents for advertisers.


Website visitors’ level of engagement with online content tends to be stronger when they are visiting smaller “long tail” sites and blogs, rather than when they are visiting large portals. This is evidenced in the below graph from eMarketer, which uses interaction rate (the total number of unique interactions per impression divided by the total ad impressions) to measure engagement.



This higher engagement is likely due to the specificity and uniqueness of content that long tail sites provide: only they meet the insatiable hunger for niche content that characterizes the Web’s most passionate users.


The challenge for advertisers lies with the sheer number of long tail sites, and the difficulty in reaching their widely-dispersed visitors. As noted in the Lehman Brothers study, advertisers are increasingly recognizing that vertical ad networks provide a convenient means to reach these highly-engaged individuals. The value of verticals is especially compelling for traditional brand advertisers, who, notes Douglas Anmuth, “have a greater sensitivity about the placement and context in which their ads appear”.


The Lehman Brothers study also describes the emergence of “white label” network management solutions:


These “white label” solutions make it easier for a leading category publisher, such as Forbes in finance, or Martha Stewart in home and living, to launch a vertical ad network without significantly investing in technology. They also enable the main publishers to focus on the advertising relationships without having to build and maintain the technology to handle the ad-serving, yield management, and the analytic tools. Forbes and Martha’s Circle are using Adify’s vertical ad network solution for their vertical networks.


Anmuth’s recognition of Adify as the leading white label provider in the vertical space is furthered by the fact that over 100 vertical ad networks currently run on the Adify platform. The Lehman Brothers study bodes well for advertisers, networks and publishers who have aligned their strategies with this emerging trend.

Adify joins Cox Enterprises

Adify Customers, Partners, Employees and Investors –


Early Tuesday morning (4/29/08), we announced that Adify has agreed to be acquired by Cox Enterprises. Cox issued a press release and the Associated Press has written about the transaction. The transaction is expected to close in early May.


When we founded Adify in October 2005, our vision was to enable entrepreneurs, venture-backed startups and major media companies around the world to extend their reach by creating and managing their own premium media networks. This vision sprung out of our management’s deep experience with ad networks in the mid / late 90s and our insights in the early part of the decade about what publishers and brand advertisers require as budgets continue to shift to online.


From day one we realized building a technology platform and services company for our customers had to be as much about the service as the technology. We spent over a year building the first version of the product and helped our first customer launch their network in December 2006. In the year and a half since we launched we have been truly blessed to be able to count 108 networks as Adify customers – from one-person driven networks building category leaders in their specific areas of expertise to the largest media companies around the globe and many folks in-between. As we have grown our customer base we have focused deeply on our network partners and their constituents – advertisers and publishers. We have continued to build and improve the technology adding more features and functionality while continuing to invest heavily in our integrated account services to ensure our network partners’ successes.


As Adify began raising our third round of financing to fund our expansion, Cox Enterprises, based in Atlanta, expressed interest in acquiring us. Although Adify was not seeking an acquirer, Cox’s history, resources, and people demonstrated that it would be a very compatible business partner and the perfect home for our company. Cox is a 100+ year old diversified media company with a long history of investing in new media businesses, serving the advertising community and, above all else, a company-wide dedication to customer service. Their known reputation for superior service all starts with a deep commitment to investing in their employees. Operating Adify independently within Cox will enable us to continue building Adify by giving our company considerable new resources to deliver superior value to our customers and to compete in the online advertising marketplace.


Our management team is committed to partnering with Cox and their many brands and continuing to build Adify for many years to come. I love this business and I love our customers. Adify’s commitment to the future of vertical ad networks and the people who build and buy them is stronger than ever with the enthusiastic support of Cox Enterprises behind us.


All too often high-tech companies build nice businesses and sell them with the founders packing their bags and leaving their early customers “high and dry.” We do not plan to have that happen here.


To all of our employees, the next phase of our development promises to be exciting – thank you for your continued commitment to our customers’ success.


To our investors, thank you for trusting our idea and trusting us.


To advertisers who advertise on Networks powered by Adify to reach over 80 million unique visitors worldwide on unduplicated, quality websites, thank you for taking the step to advertise on the quality mid and long-tail.


To publishers in Networks powered by Adify, thank you for joining, writing and developing great content and great audiences.


To all our network partners, thank you for trusting us to help you build your businesses over the last 2 years. We would not be here today without you and we hope to continue repaying your trust for many years to come.


Russ Fradin, CEO