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The battle begins…….
ESPN Turns Off Ad Nets Moves to protect brand, content; other publishers mull
mike Shields >> email@example.com
MARCH 24, 2008 –
Top Web publishers are planning a revolt. Even as more prominent sites experiment with selling remnant inventory through online ad networks, and in some cases ad exchanges, ESPN.com is saying thanks, but no thanks.
The site recently cut ties with Specific Media and several other unnamed ad networks, and is taking the bold stand that ad selling that relies heavily on arbitrage and algorithms is not for them.
“We’re heading down a path where it no longer suits our business needs to work with ad networks,” said Eric Johnson, executive vp, multimedia sales, ESPN Customer Marketing and Sales. Sources say that ESPN would like to rally support from other publishers behind this move and ultimately tamp down ad networks’ growth. Turner’s digital ad sales wing is rumored to be considering a similar move, though officials said no decisions are imminent.
“Turner, like a lot of media companies, is currently reviewing all of its media practices, and ad networks are certainly a part of that process,” said Walker Jacobs, senior vp of Turner Entertainment New Media Ad Sales.
ESPN’s decision crystallizes a philosophical debate in the online ad sales industry that has intensified since the Interactive Advertising Bureau’s annual meeting last month when during a keynote address, Martha Stewart Living Omnimedia media president Wenda Harris Millard gave her now famous warning against selling Web inventory like “pork bellies.”
Two sides have formed—those who want to protect traditional, direct selling of premium content brands and the math-loving crowd that favors automation and data. The math lovers make the traditional sellers nervous.
“There is a genuine concern about commoditization of brand inventory by some of the networks,” said Millard in an interview.
Of course, there’s a reason that online ad networks, which rose to prominence in the late 1990s by aggregating inventory across thousands of smaller Web sites, are playing a bigger role in Web publishing. Most large sites are swimming in avails they can’t sell. Insiders estimate that a range between 20 percent and as much as 70 percent of inventory can go unsold at a given time. Thus, ad networks offer a monetization alternative.
But some sites, like ESPN, see networks as profiting on their brand investments and their user data, while also threatening their own marketer relationships. Many just think using networks devalues the power of content.
Several publishers, in conversations with Mediaweek, privately applauded ESPN and hoped that others would follow suit. However, in this accountability-driven, quarter-by-quarter climate, it’s hard for any publisher to walk away from revenue, even if it’s not huge.
“Not all inventory is created equal,” said Peter Naylor, senior vp, digital media sales, NBC Universal. For example, Naylor said iVillage’s Horoscope section generates a lot of traffic but doesn’t attract many endemic advertisers. That’s why he turns to networks. According to Pam Horan, president of the Online Publishers Association, most publishers do just that.
For example, MTV Networks recently inked a deal with Microsoft to let the software giant sell its remnant inventory. Nada Stirratt, executive vp, MTV Networks Digital Media (a former top sales exec at ad net giant Advertising.com), said that ad networks “absolutely have a place for high-frequency, low-value impressions.” Plus, she likes tapping into Microsoft’s tech expertise and is comfortable with the numerous safeguards the deal offers.
So can ESPN change the model? “It won’t have the desired impact,” said Adam Kasper, senior vp, director of digital media, Media Contacts, unless the top 10 or so Web sites followed suit. ESPN is “essentially fighting technology. That’s a hard thing to do.”