With the arbitrage game gone, yes, certain ad networks will whither.
But for most, the ad network company’s opportunity splits off in a few different areas.
Services – First, with a keen understanding of the online media buying and selling process, and optimization, ad networks stand to be important experts for hire. The service business will earn traction with a revenue model based on transactions or performance. From here, performance-based revenue models will hold the biggest payday. The ad network service business is where slow-moving, media agencies will get disintermediated. But, the new ad network service agency will also be the media agency’s best friend as they plug-and-play for agency clients, as needed.
Data – Some networks will leverage their unique technology to provide data or targeting feeds to exchange participants. Advertisers get to map their real-time buying against audience/contextual/creative targeting data provided by the ad network. More performance or transactional models are possible here.
Technology and Tools – Leveraging their experience in the space, ad networks who are more technically skilled will be able to create new tools that make the exchange work more efficiently such as buying platforms and full-strength, creative optimization tools. Some may even start their own RTB-enabled exchange.
For all the talk of too many ad networks, and given the opportunity unlocked by the exchange and RTB, ad networks will continue growing and competing with all parts of the advertising ecosystem.
It’s a new arbitrage for the ad network as it bridges gaps in service, data and technology. The ad network lives!