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An online advertising network is a company that acts as a liaison between companies that want to advertise online and websites that want to sell advertising space. An online advertising network acts as a form of a broker, where it negotiates deals with various large and small websites that want to sell ad space. The online advertising network company can negotiate a lower price per ad by promising to bring advertisers in bulk to the site or other online venue. Using an online advertising network can be mutually beneficial to all three parties — the online advertising network, the advertiser and the website selling ad space. This is advantageous to the advertiser too because it allows them to advertise online at a much cheaper cost than if the advertiser went to the website selling advertising space directly.
According to Bloomberg Businessweek, if an advertiser using online advertising goes directly to a website directly, the advertiser may pay a fee for every 1,000 consumers it reaches. As of 2009, about 70% of online ad space was bought 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 of the advantages is that the online advertising network has relationships with hundreds and sometimes thousands of websites looking for advertisers. This means they have the relationships with the websites where a company’s ideal customers are visiting, so an online advertising network can work to get a company’s ad on relevant websites.
One of the downsides is that the advertiser does not know where the online advertising network will place its ads. Even with this disadvantage, most advertisers believe that it is a cost effective way to get their advertising and marketing campaigns spread out over the Internet.
The websites that are selling the ads through the online advertising network are also benefiting from the relationship. For one thing, the website is making money from selling the advertising space. Second, the website does not have to go out and find advertisers on its own. Third, it drives more traffic to the website or specific pages of the website where the ads are located.
Some advertising networks sell advertising space beyond websites.These agencies also sell space in online newsletters, emails and blogs.