Consolidation to boost online ad market

Analysts confident of major gains

The online advertising market is set for a major boost, according to analysts, as recent consolidation in the online advertising market leads to big gains for advertisers.

Jupiter Research said that, despite fears over recent acquisitions such as Google's purchase of DoubleClick, ad vendors will be able to lure new advertisers with new services and combined advertising packages.

"After acquiring ad networks and ad servers to round out offerings, the near future of online advertising will look somewhat like pre-cable TV, with an oligarchy of powerful conglomerates controlling prices, audiences and thus advertisers," said Jupiter Research president David Schatsky.

"Much of the premium content on branded websites will remain beyond their grasp, but relationships with such sites will continue to strengthen."

Analysts predict that the consolidation resulting from the recent rash of acquisitions will allow vendors to expand their offerings.

Researchers noted that just 23 per cent of advertisers currently believe that online ad networks are more efficient than deals with individual sites, a figure that analysts predict will soon change.

As ad networks continue to make acquisitions and add new services, analysts predict that the networks will become more powerful and lure in new business.

"The impetus for acquisition is obvious for the conglomerates," said Jupiter Research online advertising analyst Emily Riley.

"The potential to improve their portfolio of offerings to advertisers and publishers, as well as overpower their competition, theoretically lies in the control of ad servers and ad networks."