Small Ad Marketplaces: Can They Get Big?

The past couple of years has been great for online advertising. The market has grown tremendously, and with it there are more options out there for publishers and advertisers to get together to make money. I'm a big fan of this as a long time web publisher and small advertiser. I don't want one or two companies dominating the online advertising world because I know that competition brings out the best in companies and choice is very important. That being said, while I support and love to see the multitude of "ad marketplace" type of companies on the market, I see some things that make me wonder how they will get to be major players in the space. So who am I talking about here? In the past two years we've seen BlogAds, Adify, 1. Volume and Time The most popular platform for online advertising is Google Search. Advertisers can spend the time and effort to learn the Adwords interface because it will drive a high enough volume of clicks and conversions to make it worth the time. Because there is so much volume, it also allows lots of clicks to be bought at a low cost. There is a huge drop off from the number that buy on Adwords to the number that buy on the next biggest self-service platform, which would be MSN Adcenter. Then an even bigger drop off to these small marketplaces. Why does this occur? Each ad system I work with as an advertiser is another thing to learn, and to spend time on, and people use Google primarily because of the volume (and quality). You spend a few hours setting things up, and you get a large number of clicks and conversions. You spend the same time buying on a smaller marketplace and you aren't going to get close to as much volume. With these other smaller ad marketplaces, each one is a new interface to learn, and advertisers aren't sure if they can drive the necessary volume to dedicate the effort to trying it out or sticking with it. I've tried a few of them and had this exact experience. It's not always a case of just increasing your budget either. If you are looking for targeted traffic, you can't just blow the bank on a small marketplace trying to drive larger volume and get what you want. So in my tests, I spent the time to learn these new marketplaces but couldn't drive enough volume to justify continually monitoring and spending money there. My failure as an advertiser in turn hurts the publisher on the other side because they are no longer getting my money. 2. Hitting ROI Additionally, very few ad marketplaces provide feedback on ROI, or guarantee that as an advertiser you'll hit your ROI goals. In fact, I don't think any of them do, although using Google conversion code and Online Media Auction Services Already Exist Contextual Text Ads Get All The Hype But Is Valueclick Isolating Itself? Right Media, the business unit owner for Conversion Rater blog