Monday, September 21, 2009

Pricing Tensions Shake Up Web Display-Ad Market

The market for online display ads -- those with text and pictures that
border a Web page -- has dwindled amid the ad recession to an estimated
$20.8 billion in 2009 from $23 billion in 2008

Some big Internet companies, such as Google, Microsoft and Time Warner's
AOL and Yahoo, are looking to profit from the discord. They are trying
to cut out the ad networks altogether by developing ad exchanges, which
allow advertisers to bid directly on the ad space available on a large
group of Web sites. Google unveiled its ad exchange Friday.

"Advertising networks are big aggregators. We have to emphasize that
we are premium," says Nada Stirratt, executive vice president of
digital ad sales for Viacom's MTV Networks. "We produce original content and attract fans, not just fly-by-night users."

In a bid to appeal more to advertisers and visitors, Web sites have
added pages of news or entertainment during the current downturn,
expanding their ad space and thus their reliance on ad networks.

At the same time, many big advertisers, eager to save money, have
shifted more online business to the networks. Ford now buys about 40%
of its display ads through ad networks, up from about 5% three years
ago, in part because it is "more efficient," says Scott Kelly, Ford's
digital marketing manager.

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