The use of "ad networks" to fill unsold inventory rose six-fold from 2006 to 2007 from 5 percent of total ad impressions to 30 percent of impressions. These network ads, also called remnant advertising, are typically used to fill in the gaps where ad space has gone unsold by a company's own sales force.
When a website increases the use of remnant ads, they still earn more than if they had filled the space with an unpaid house ad, but average overall CPM rates fall for the site. Sites which would have made $10-20 CPM rates on the ad space normally, have to settle for remnant ads which pay much less.
The IAB release, which outlines this trend, quotes a Bain analyst who warns that sites which use remnant advertising "risk devaluing the premium nature of their brands, particularly in light of ad networks growth and their dramatically lower pricing." Advertisers which would normally buy high-priced ads could buy exponentially more ads on remnant networks and possibly reach the same users for lower overall cost.
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