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The Changing Performance Landscape - A Retrospective

Written on
December 3rd 2007
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by DM Confidential  |
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In addition to CPA Networks, ad networks had a large presence on this year’s floor, those left anyway. They’ve received more than enough of their share of press, including the most recent announcement that Fox Interactive Media looks to follow in the footsteps of AOL, Yahoo, and MSN in becoming an ad network and not just an interface for its internally owned properties. Like the CPA Networks, the increasing prominence of ad networks, which have always had a dominant presence at Ad:Tech, stems from the ever confusing and fragmented nature of the ad landscape. We can infer from the CPA Networks and ad networks higher profile and quantity that the ad landscape has become more confusing not less over the years. And, if previous years tell us anything, this confusion and lack of a clear winner in solving it means that we can expect some potentially turbulent times ahead. The ad network landscape will change but less so than the CPA one, as fewer players exist. Its increased attention implies that sites continue and will continue to need outside help in monetizing. It’s as though they are prepping for an upcoming inventory war to mirror the homes that might be dumped on the housing market.

The CPA landscape doesn’t indicate supply or demand on a website like ad networks do, but its incredible fragmentation and lack of differentiation means the landscape will shift primarily because there are too many players offering a service seemingly indistinguishable from an ad buyers perspective. That’s why today’s CPA networks look and act like the paid search placement firms from 2002. - instead of a company saying we can get you position one or two when you want, you have companies saying they will get conversions when you want. Number of booths aside, the reason today’s CPA networks are yesterday’s placement focused search companies is that they don’t own distribution. They simply offer a service. Luckily for all of us in this area, even though Google owns the distribution, the complexity of their system still makes it such that advertisers will seek out and want expertise. As for the future of the CPA Network, the lack of differentiation (in the eyes of advertisers) and their role as service provider not traffic owner means that this years abundance of CPA Networks doesn’t signal their arrival, but the arrival of performance marketing. It’s going to be an interesting next couple of years as performance marketing undergoes the same consolidation and shakeup that search and the ad network landscape has.

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