Ad networks accounted for 30 percent of major publishers' online sales, a huge increase from 5 percent in 2006, according to a study by the Interactive Advertising Bureau and Bain & Co.

The report reiterated that the use of remnant ad networks could erode premium prices. At least for last year, the price disparity between CPMs for unsold inventory generated by ad networks versus the direct sales publishers remained wide. CPMs on remnant ad networks charged from US$0.60 to $1.10 on average, compared to $10 to $20 in directly sold display inventory, or only 6 to 11 percent of direct pricing, paidContent reported.

Moreover, while Web sites have benefited from making more inventories available to ad networks, the issue is that the revenue gains are fairly small due to the cheap prices. Thus, even though third party ad networks made up about one-fourth of total inventory sold, they only accounted for 2 percent of display revenue. “Publishers' desire to reduce their unsold inventory levels appear connected to greater use of ad networks and, therefore, to lower CPMs,” the report stated, according to paidContent.

The report pointed out that better ad network targeting and inventory management will lead to higher CPMs.

John Frelinghuysen, a partner in Bain's Global Media practice, said that “further scale-up and (potential) consolidation of networks should enable higher margins,” paidContent reported.