John Battelle has his own plan for riding out the holiday ad-buying slump. The founder of online-advertising network Federated Media, which brokers ads for sites like Boing Boing, GigaOm, and Dooce, can't fire writers, but he can cut the price of their ads. John, be careful. Your inbred network is made up of bloggers who are also endorsers, who also shill their own products. Your list of clients is months out of date — it includes Digg and Fark, who long ago dropped Federated. Cut ad rates too carelessly and your Rube Goldberg business model may backfire. I mean this as the highest compliment: If anyone can lay himself off by accident, that someone is John Battelle. Here's the spam that Federated sent to bloggers this morning:
Online ad networks are set to consolidate, reports the Wall Street Journal. There are 400-some networks, which act as middlemen between advertisers and publishers to broker space on websites, modeled after Google's successful AdSense business. But the big deals in this space have already taken place — aQuantive to Microsoft, Right Media to Yahoo, DoubleClick to Google. The remainders are starting to realize that, like bad leftovers, they're about to be thrown out. So the bigger players are starting to snap up the smaller ones, at bargain prices.Or what seems like a bargain. But even the bigger online ad networks are troubled. Take Glam Media, for example, the splashy ad network founded by Samir Arora, which he has pitched as "the future of all media." A dismal future indeed, if so. Glam grew quickly by promising publishers rich ad-rate guarantees, and then ran into trouble selling the inventory it had acquired at those rates. In the third quarter, according to two sources familiar with Glam's finances, Glam took in $14 million — $11 million short of the $25 million forecast Arora gave investors when he was peddling a stake in the company. Layoffs ensued. It's not clear how much of the $85 million Glam raised in February is left to buy up competitors. And if the advertising market is due for a deep downturn, as many in the industry fear, then the more successful ad networks would be wise to husband their cash, rather than spend it on weaker rivals. Darwinian market forces will do away with the lesser ad networks soon enough. Roll up, or roll over? The latter seems wiser.
LinkedIn Demographic Data Jun08Click to viewBusiness networking site LinkedIn launched an online ad network today. The world doesn't need another online-ad network, which offers repackaged ad views from multiple websites, sold as a single buy to advertisers. There are already 300 or so. But LinkedIn may prove a survivor when the ad-network bubble bursts.
Web metrics firm ComScore says it going to begin tracking ad networks' "potential reach" and "actual reach" for online-ad buyers and sellers. A translation: Ad networks, in theory, can place ads on all of a Web publisher's pages, and those are the numbers they trot out when luring ad dollars. Operations like Glam Media compound the confusion by portraying some of the sites they represent as if they were websites they owned. In practice, publishers of a respectable size use networks only to fill a small percentage of their least valuable inventory. The net effect: industrywide, advertising inventories look much larger than they actually are, leading ad buyers to drive harder bargains. If ComScore can expose this part of the ad-network scam, publishers may benefit from higher rates. Ad buyers? They won't complain: As soon as they've spent their clients' online budgets, it's time for a two-martini lunch..
MP3 blog like Peter Rojas's RCRD LBL attract "tastemakers who wield considerable influence over their peers" reports Fortune. Only they don't attract very many of them. For example, Thefader.com has 93,000 monthly uniques, RCRD LBL, 125,000 and Thetripwire.com about 15,000. So what are these small sites with attractive demographics to do? Hire crafty ad sales teams to sell limited, premium inventory to sponsors desperate to reach their "boutique" audience? No!
The news of Adify's $300 million sale was likely the first time most had heard of the online-advertising company. The San Bruno startup was so obscure that Silicon Alley Insider, which first aired the rumor of a sale did not include Adify in its list of the 25 most valuable startups. The price cable-and-newspapers conglomerate Cox paid for the startup would otherwise qualify it for that list. Ad networks, which allow advertisers to buy and publishers to sell ads across multiple websites, have become faddish; and Adify, which allowed anyone to launch a network of their own, caters expertly to that fad.