A Jason Calacanis view on Ad Networks

Jason Calacanis of Mahalo provides the Silicon Alley Insider his strong opinion on the value of ad networks. His viewpoint is from someone trying to grow a huge business with ad revenue in the 8 figure plus range. If that is the case, it certainly makes sense to have your own ad sales team as he states…I don’t think anyone will argue that. He also dings ad networks for running poor quality ads. I agree that if my ad network (Fantasy Sports Ventures) started running ads for AdultFriendFinder on my site, I would remove their ads immediately. Another challenge for vertical ad networks is running competitive ads (by design, these networks serve ads on sites that are highly likely to be direct competitors to other sites in the network…so the ability to remove those ads is also key).

I have stated in the past that ad networks, in their current form, are ideal for running ads on small sites that can’t afford their own ad sales person/team. The ad networks will become really valuable if they can deliver higher value sponsorship or integrated marketing opportunities instead of just banner ads. Their ability to execute on these higher CPM opportunities will determine the ultimate winners and losers in the highly competitive ad network space.