Media cos. battle Web portals on ads
NEW YORK (AP) - March 24, 2008 The latest, Forbes Inc., announced Monday that it will start
selling ads this spring for about 400 financial blogs. In recent
months, Conde Nast, Viacom Inc., CBS Corp. and other major media
companies also have unveiled topic-specific ad networks to lure
advertisers that want to buy more ads than any single site can
sell.
If newspapers, magazines and broadcasters cannot expand online
ad inventory, they are "under threat of becoming less and less
relevant to the advertiser," said Russ Fradin, chief executive of
Adify Corp., whose technology runs ad networks for Forbes and
others.
But these media networks - some linking fewer than a dozen
hand-picked Web sites - may have a tough time competing with the
larger networks of thousands assembled by Google Inc., Yahoo Inc.,
Microsoft Corp. and Time Warner Inc.'s AOL.
Those companies have been expanding, too, spending at least $11
billion collectively to buy smaller ad networks and technologies -
and in Microsoft's case, also bidding more than $40 billion for
Yahoo.
"As our technology has continued to advance, we've gotten
better and better," said Lynda Clarizio, president of AOL's
emerging Platform A advertising unit. "We can handle a lot of
demand from advertisers."
The expansion drive by both sides comes as Internet users
increasingly divide their time across scores of sites large and
small. Advertisers would rather not deal with thousands of
individual Web sites. Media companies and Internet portals alike
are promoting networks as a way to reach larger audiences with
"one-stop" ad buys.
So far, the portal ad networks have largely succeeded in selling
their affiliates' leftover ad inventory at discounted rates and
sharing revenue.
Now, by employing targeting techniques such as matching ads to
visitors' surfing habits, those large networks also are stepping up
their bid for higher-value ads - the ones that have traditionally
gone to sites run by the media companies.
Accustomed to selling ads on their own in offline channels, many
traditional media companies have been resisting overtures to join
the larger networks.
"One of the big ones said to us, `You guys are really good at
creating content and we're really good at selling advertising. It
would be perfect,"' said Sarah Chubb, president of Conde Nast's
online division, CondeNet, which has signed up a handful of blogs
on fashion and technology. "We're pretty good at selling
advertising, too."
Smaller networks can offer advertisers a consistent audience on
pre-approved sites, while giving those sites individualized
attention.
"The folks at Forbes really understood our business," said
Steve Woit, publisher of Xconomy, a blog joining the Forbes
network. "A larger network, whether it's Google or others, has to
deal with every industry and large consumer sites."
Rather than join the large networks, Martha Stewart Living
Omnimedia Inc. figures it is better off recruiting one or two dozen
leading lifestyles sites that meet its editorial standards and
selling higher-priced ads to Macy's, Ace Hardware and other brands.
Martha's Circle launched in November.
"Publishers are brand stewards," said Wenda Harris Millard,
the company's president for media. "The folks ... who are
assembling these massive networks, most come out of the technology
sector. Some of them are good business models, but they are not
about protecting brands."
Viacom's MTV and Nickelodeon have ad partnerships with
independent parenting sites and are launching groups this spring
around music and men's lifestyles. CBS announced last week several
local ad networks around CBS-owned stations.
Other media companies are forming networks among themselves. In
February, Gannett Co. and Tribune Co., the nation's two largest
newspaper publishers, joined Hearst Corp. and The New York Times
Co. to form QuadrantOne to collectively sell some online ads. On
Thursday, QuadrantOne said another 26 newspaper companies have
joined.
Operators of the larger networks, however, say smaller networks
can never produce on the scale advertisers are seeking.
Todd Teresi, a Yahoo senior vice president, said the media
companies' efforts are a "valid path to go, a first step."
But even if a media company can assemble 10 or 20 like-minded
blogs, he said, overall traffic wouldn't be growing as much
compared with what a large Internet company can offer.
In fact, Forbes is initially looking to increase business by
just 10 percent to 15 percent, even with hundreds of bloggers.
And in mid-March, The Washington Post Co. ended its 16-month-old
ad network because many advertisers had cheaper options through the
large portals and blog-specific networks like Blogads.
"We were holding out for value but there was too much
inventory," said Jeff Burkett, director of ad innovation with the
Post's interactive unit.
Instead, the Post hopes to increase ad opportunities by boosting
traffic. For starters, it plans to start carrying items from the
PaidContent blog and will likely share ad revenue.
Yet the media companies are finding their own networks hard to
resist, even if they join the larger efforts. MSNBC.com, a joint
venture between General Electric Co.'s NBC and Microsoft, uses
Microsoft's ad technology and sales teams but also recently formed
networks around politics and the female-heavy "Today" show.
"We can't match what Microsoft does, ... but they represent a
lot of different products," said Kyoo Kim, vice president of sales
with MSNBC.com. "We want to make sure we protect our brand and be
in charge of our own destiny as well."