Saturday, February 5, 2011

Vertical Ad Network - An Opportunity

In many of my previous articles I have propagated the importance of starting out with focussed target segment. Tight segmentation will result in optimum utilisation of resources. In my book Women Entrepreneurship: Role of Women Entrepreneurship Towards more Inclusive Economic Growth, I have highlighted the importance of identifying niche segment for start-ups.
The growing online culture in India has forced the advertisers to budget for Internet as an important medium to reach the customers. This has caused an explosion in online ad network industry. At the onset of it, the online ad networks were mostly horizontal in nature and this industry evolved in a clutter. While on one side the publisher inventory was on the rise, there was not enough of any inventory aggregation in any specific vertical so as to make scalable profitable business sense. But the trend is changing and the ad networks are focussing now towards aggregating publisher space for verticals. Even advertisers are more interested in strategically targeting the growing online communities through the verticals. Hence vertical ad networks [online] is for business case today.
Like in any other marketing stint, it pays to target a tightly segmented market. This makes it logical for the advertisers to aim at online verticals as a part of their online marketing strategy. For e.g., if I have to sell any baby product, then it makes a lot of sense for me to approach such vertical ad network which has the publisher inventory from the websites/blogs/discussion boards etc. which serve the online women community with certain other specs like income, marital status, working/non-working etc. This plan will definitely work better than going through horizontal ad networks where I do not know the nature of the publisher inventory. In simple terms, as an advertiser, I am increasing the odds in my favour if I approach vertical ad network rather than try to hit the target in a clutter.
Though vertical ad networks are common in the US and UK, India has just started witnessing the growth of a few vertical ad network companies. There is a huge potential in this industry and this is one of the hot trends for internet as the medium of communication today. Approximately ad networks get about 5-6% of online ad spends in India whereas in the US and UK markets the average lies between 11%- 15% of the total online ad spends excluding the online spend for Google. Certainly with all other trends like increase in broadband usage in India across tier 1, tier 2 and tier 3 cities, and introduction of mobile devices with internet access, it makes a lucrative business model to be explored.

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