Ad Inventory Swells As Networks Thrive

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While advertisers fret about a shortage of high-quality ad space in hot areas like video, they are enjoying what a Yahoo executive called a “glut” of cheap ad space thanks to the rising popularity of social networks.

Yahoo said last week its disappointing third-quarter ad revenue was due, in part, to the explosion of sites like MySpace and YouTube. MySpace alone produced 35.7 billion ad impressions last month, per Nielsen//NetRatings, giving direct response marketers and ad networks fertile new sources for cut-rate ad space, which Yahoo sells in sections like e-mail.

“That is going to change the market dynamics,” Yahoo COO Dan Rosensweig told investors last week.

For now, the beneficiaries of the supply surplus are ad networks, which are the usual outlets for extra inventory.





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