Online ad network adoption up 24% since 2008


69% of media planners and agencies now use online advertising networks as part of their digital ad buys, representing a 24% increase in the past 18 months — according to a new study conducted by Adify Media. The leading media planners and agencies that participated in the study also reported that branding has become the top priority for online campaigns as compared to DR, where the industry began. Adify’s December survey was completed by 216 planners, interactive marketing directors, and execs from Carat, Mediavest, MPG, Ogilvy, OMD, Starcom, and Universal McCann.

According to recent research from J.P. Morgan, display spending will rise 10.5% this year after a 5% dip last year. The previous display spending dip may be attributed in part to the industry seeking cost-effective reach; Adify Media’s survey found more than two-thirds of its respondents use online advertising networks because of their cost effectiveness.

Targeting, transparency, and quality are the top three attributes that media planners look for in online advertising networks. Interestingly, creative capabilities were the least important attribute noted.

“Especially in light of the Dynamic Logic study that found that creative quality is 50 to 75% responsible for campaign success or failure, agencies must start evaluating the creative capabilities of networks,” said Russ Fradin, president of Adify. “As the industry looks for better ways to engage, not just reach, their audience, brands need to focus on compelling creative that builds an ongoing conversation with consumers and placing it where consumers spend time.”

Other key findings:

— More money is being allocated online each quarter:
   – 56% of respondents’ budgets were more than $500k in 2008.
     73% were over $500k in 2009.
   – In 2009, 37.9% of the respondents spend between $1-5 million
     per quarter on online advertising, 15.2% of respondents spend
     $5-20 million per quarter, and 5.9% spend more than $20 million
     per quarter on online advertising.

— Branding is a major focus for online ad campaigns:
   – 83% of respondents allocate 50% or more of their budget
     to branding vs. direct response.

— The use of ad networks continues to grow:
   – 69% of media planners and agencies now use online advertising
     networks, compared to only 45% who were using ad networks
     regularly according to Adify Media’s May 2008 survey.

— Awareness of vertical ad networks (VANs) continues to grow as a way to
   reach niche audiences:
   – 72% are familiar with VANs versus 56% in 2008.