Let’s get ready to rumble!!! 
There’s a big debate raging in the interactive world about whether advertisers should purchase online ads from Premium Content Providers or their customers / competitors, the Ad Networks. Here’s a quick breakdown:
Premium Content Sites (aka Publishers) include CNN.com, WSJ.com, CBSnews.com, ESPN.com, SI.com, and countless others who have literally spent billions to provide great content. The premium content, combined with the rigid advertising guidelines offers highly valued placement and brand-enhancing context for advertisers to reach and engage audiences. But the premium content sites are relatively expensive and the reach beyond the site or small group of sites is limited.
Ad networks, which include advertising.com, google, valueclick, tremor media, specific media, audience science and 24/7 real media, to name a few, aggregate media across thousands of sites and apply targeting techniques to reach your audiences. Through an ad network you can serve ads to the same person (or group of persons) across multiple sites. The ability to target and re-serve ads is very valuable, especially now that we know that impressions create awareness which improves online conversion rates. Because ad networks buy remnant inventory from premium content sites for a fraction of what advertisers pay, they generally offer much lower cpm rates, allowing advertisers to get more reach for their limited dollars.
Both ad networks and premium content sites have strong arguments as to why you should buy their media over others. In recent days, a flurry of articles and points of view have emerged. Here’s a summary:
The case for ad networks is made in “A Pricing Revolution Looms in Online Advertising” (Businessweek.com): “Demographic profiling and behavioral targeting by such companies as Google, Quantcast, and ValueClick is slashing ad costs and threatening Web publishers” To read the article visit http://tinyurl.com/con2lv
The case for premium content sites is made in today’s rebuttal “A Pricing Revolution May Loom, But Context And Content Still Rule” (MediaPost). “Lower-costs seem appealing in the post-recession world, but short-term savings are short-sighted. For advertisers who care about brands”. The article then lists several considerations that must be addressed when you get in bed with the devil (aka ad networks).
So which is right for your brand or your client? Like most things in life… it depends. My take is that the “right” medium depends on your brand, audience, objectives and budget. Each medium has its pros and cons. While context and content are very important, so is cost and the ability to target. If brand protection is paramount, go with the content sites. If you are seeking to maximize lead generation at the lowest possible cost per lead, start with the ad networks (in conjunction with paid search, of course). Over time, their offerings will look more and more alike.
As AdAge reported in the 4/20/09 digital issue, “large publishers are looking more like ad networks” and ad networks are starting to look more like publishers by picking up premium content inventory and focusing on targeting and brand safety. Over time I expect we’ll see these frenemies become more and more alike. And who’s to say an ad network won’t become an attractive extension for a traditional publishing company seeking to expand its digital footprint (e.g. would Valueclick make sense as a subsidiary of News Corp?).
Media will continue to evolve and the mix of players will continue to shift. But that’s what makes this such a fun industry and an exciting time to be in the digital marketing arena… even in this crummy recessionary market.
Comments are welcome!!!
p.s. – my apologies to those ad networks and content sites I omitted in this update. I just wrote what came to mind.. if you were excluded you may want to invest in some online advertising. I know a great boutique interactive shop that would love to help 
I’ve been on both sides over the last 12 years and I’m convinced there is room for both to survive. At the end of the day content is king and publishers with desirable content and a desirable audience can decide to allow ad networks to sell some of their remnant inventory while partnering with premium advertisers for premium placement and integration. Premium advertisers don’t just want impressions. They want integration and affinity with the site’s brand in high value ad placements. Publishers that allow ad networks to sell some of their remnant inventory can also pick and choose which advertisers they allow so if they’re already working with a premium advertiser they don’t have to accept the remnant buy from the ad network. If publishers are smart they’re offering their advertisers a blended cpm that includes high value and remnant inventory.
In some ways, this is a false choice: ad network vs. premium publisher direct. It’s just not efficient to work with tens and hundreds of publishers even if they are large; unless you are going to do some kind of real deep integration in which case you’re not doing tens of deals but probably 3 or 4. But non-transparent ad networks are not the answer either. We need a new model – operational efficiency, pricing flexibility, pay a premium for guaranteed volume, and let people compete for market prices 100% transparently for the leftover inventory.
And then once you’ve done all that, figure out a way to allow consumers to comment on the quality of the ads on the site and have that have an influence on what shows up (this last part is worth a few articles all by itself…).
Good info
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