Ad Networks: Synthetic channels Lightspeed Venture Partners Blog

I believe that among the biggest beneficiaries of these trends were the content material precise ad networks. With more ads buying on networks, and with viewers concentrated on being the 1 differentiator, networks that may offer extremely targeted audiences focused where an advertiser is endemic are hard to beat. As I’ve posted about ago, having endemic advertisers makes for higher RPMs, and hence a smaller level of ordinary traffic scale to get to high sales. At AOL, the channels with endemic advertisers always got the highest CPMs and sell via rates, and content material specific ad networks are essentially growing synthetic channels. Many ad networks do contextual targeting in their efforts to get endemic advertisers next to content material with Google and Yahoo being the most in demand.

Others use behavioral concentrated on. Both of those strategies were effective in lifting RPMs, but both require a leap of faith from the advertiser that the “black box” truly works. To mitigate this risk, contextual networks customarily have CPC or CPA based pricing models. However, these models don’t trap all of the value of a branding crusade, which could only be fully priced by a CPM model. This leaves some value on the table.

Many endemic advertisers are not looking only for “in market” buyers who want to make a purchase order resolution imminently. They also are searching to build brand awareness to influence future purchase selections.

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