Paul wrote a couple of weeks ago about how some ad networks are taking on some of the creative development services of ad agencies as they look to expand the level of campaign engagement they offer their clients. With the announcement a couple of days ago of Sportgenic Torque, a product whereby clients of this active sports-oriented vertical ad network can also buy in other media (including TV, events and print), we see that cross-media campaign management can be another way by which well-positioned vertical ad networks can tread into agencies’ turf.
In some ways, a small vertical ad network with heretofore limited reach into online only might be a surprising place for advertisers to turn to when broadening campaigns into different offline channels. Advertisers turn to agencies not only for their creative development expertise and access to media distribution, but also for their ability to coordinate complex campaigns. Online campaign management has been a relative weakness, the establishment of ad network arms like Publicis’s VivaKi notwithstanding.
So what’s the potential appeal of allowing an ad network manage all of your campaigns? It’s possible that publishers understand that, aside from the dismal growth we’re seeing now as a consequence of the downturn, online advertising will continue to be a larger piece of their ad spend in the coming years. Also, ad networks’ soup-to-nuts performance tracking can instill confidence in an ad network’s alignment with advertiser priorities as they look at media with more nebulous value to the top-line; advertisers can expect the same level of attention to ROI across their campaign. Finally, an ad network might be the first entry point for smaller advertisers whose first foray into advertising began online, but have since sought to grow beyond. One could argue this is Google’s strategy in expanding into radio and (its now defunct) print.
Does this present a threat to the big agencies? Probably not. It remains to be seen how many of the vertical ad networks will manage through the ad market crunch. But if they do come out thriving, and follow a similar approach to Sportgenic, then the “death by 1000 cuts” might change the agency landscape substantially.