Ad network Collective Media raises $20M more, targets the big three
Collective Media, an ad network you probably haven't heard of, has been slowly rising through the ranks of ad networks. It is the 19th largest ad network, according to the most recent Comscore data (February), up from 21st last year.
Context & Ripple Effects
Collective Media sits in the middle of an ad-network field that has kept drawing venture money straight through the downturn: AdBrite raised $23 million back in November 2007 ($23M raise), and mobile network AdMob paired profitability claims with a $15.7 million round just last October. At 19th on comScore's February reach rankings, up from 21st a year earlier, Collective Media is a climber rather than a leader.
The leaders set the bar: AOL's Platform-A topped comScore's March 2008 ranking by reaching more than 9 out of 10 U.S. internet users (Platform-A's #1 comScore rank). A $20 million raise from the 19th spot is a bet that capital can buy the publisher relationships and sales capacity needed to close that gap.
First-order effects
- Collective Media now has war-chest ammunition to sign publishers and expand sales coverage, attacking the big three ad networks directly rather than competing only for leftover inventory.
- Its steady climb from 21st to 19th on comScore's monthly reach data gives the company a measurable pitch to advertisers weighing networks on audience size.
Second-order effects
- Funded mid-tier peers such as AdMob — which raised $15.7 million in October 2008 while claiming profitability — now compete in a market where each raise forces rivals to spend more to lock up exclusive publisher supply.
- Publishers gain negotiating leverage as capitalized networks bid up revenue shares, compressing margins across the second tier of the business.
Third-order effects
- If reach rankings keep driving advertiser budgets, the long tail of ad networks should consolidate toward a handful of well-capitalized players, turning today's challengers into acquisition targets or casualties.
- Comscore's monthly rankings harden into the de facto scoreboard for the category, concentrating pricing power among networks near the top of its measurement.
The trend: Venture capital continues to fund display ad networks betting that bought scale — not technology alone — will decide who survives the category's consolidation.