Online advertising networks act as brokers between companies and websites selling advertising space, negotiating deals and offering lower prices. Using a network benefits all parties, but advertisers may not know where their ads will be placed. Some networks also sell ad space in emails, newsletters, and blogs.
An online advertising network is a company that acts as a link between companies that want to advertise online and websites that want to sell advertising space. An online advertising network acts as a form of broker, where it negotiates deals with various large and small websites that want to sell advertising space. The online ad network company can negotiate a lower price per ad by promising to bring advertisers in bulk to the site or other online venues. Using an online ad network can be mutually beneficial for all three parties: the online ad network, the advertiser, and the website selling advertising space. This is also beneficial to the advertiser because it allows them to advertise online at a much cheaper cost than the advertiser who used to go to the website by directly selling the advertising space.
According to Bloomberg Businessweek, if an advertiser using online advertising goes directly to a website, the advertiser can pay a commission for every 1,000 consumers it reaches. As of 2009, approximately 70% of online advertising space was purchased directly from a website, while 30% was purchased through an online network.
Using an online advertising network has its advantages and disadvantages for advertisers. One benefit is that the online advertising network has relationships with hundreds and sometimes thousands of websites looking for advertisers. This means that they have relationships with websites where a company’s ideal customers visit, so an online advertising network can work to get a company ads on relevant websites.
One of the disadvantages is that the advertiser doesn’t know where the online ad network will place their ads. Even with this downside, most advertisers find it to be a cost-effective way to spread their advertising and marketing campaigns across the Internet.
Websites that sell ads through the online advertising network also benefit from the relationship. For one thing, the website is making money by selling the ad space. Second, the website doesn’t have to go out and find advertisers on its own. Thirdly, it drives more traffic to the website or specific pages of the website where the ads are located.
Some ad networks sell ad space beyond websites. These agencies also sell space in newsletters, emails, and online blogs.
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