I hate using this word, but it sure “feels” like it’s time for another paradigm shift in the model. Google’s dominance of all things CPC-related cannot last forever, particularly as prices rise for advertisers like me (we spend almost $20k a month on Google and are a small biz!) and as they grow increasingly stingy with publishers. Alternative aggregators of targeted traffic must arise to compete for my ad dollars and certain can find all the goofy ass websites out there with traffic and no clue how to monetize it.

Any suggestions for a guy who wants to divert half his ad budget from Adwords?

What march are you talking about OM? You could have put a link to exemplify your point. Google’s first “ad exchange ecosystem” seems to be adsense(less). It has taken them too long to figure out that it serves untrammeled trash. They are now purchasing some ad networks, but what scalable innovation are they bringing that will help them occupy niches? Your point is not clear.

I have been covering vertical ad networks at length for over a year now. I believe they are the biggest threat to Google’s AdSense for Content.

Here are some relevant posts:
(link)
(link)
(link)
(link)

You can also extensive interviews on the topic with the CEOs of Adify, Travel AD Network, and HotChalk - to really understand the trend:

(link)
(link)
(link)

And, you can see an in-depth interview of Steve Hafner, Kayak’s ceo here:
(link)
Kayak seems to be doing very well.
Sramana

When you also look at the economics of ad networks, the value is at the tail, meaning lots of small advertisers and publishers. Many ad networks can suffer if they are dependent on a few large publishers or advertisers which have strong negotiating leverage and there is competition among the networks.

Hence, I would think that there are absolutely opportunities for vertical ad networks to thrive, if they do some of the following, some examples:
- Solving unique problems, perhaps is this in some form of targeting, dynamic ad creative, etc. something that the larger guys can’t specifically solve for a vertical
- A unique advertiser acquisition tool, can the network penetrate an large and fragmented group of advertisers that would not traditionally work with the larger networks
- A network that is able to reach a fragmented set of publishers and not too dependent on a few larger partners
- Offering a unique reporting and data insight for the advertiser targeted to the vertical which the horizontal network cannot deliver, which adds unique value beyond media buying towards business intelligence.

I’m sure there are lots of others. Vertical networks will absolutely thrive when they solve some unique problems. I have high hopes for Kayak’s network.

Pete Flint from Trulia.com
Yes, I’m biased, we have the leading real estate ad network (link)