Next Step for Ad Networks (YHOO/TWX): Buy Inventory

Judging from commentary about the latest AdTech conference (and from inbound sales inquiries we receive), there are now several dozen ad networks clamoring to “rep” content sites like this one.  AOL (TWX) reorganized its whole company to support its ad network strategy. Yahoo (YHOO) bought Blue Lithium. Google’s buying DoubleClick. WPP bought 24/7.  Dozens of small, private providers like Federated Media and Glam are going after vertical niches.  And now everyone from Martha Stewart to to News Corp (NWS) is plunging headlong into the rep business.

Well, we’re busy, too, so instead of handling your kind inquiries individually, we’ll just tell you what we want (and where this already ludicrously overcrowded market is headed):

Here’s what we want:  We want you to buy our inventory… 

If your sales team is so good that you think you’ll be able to sell our units for a $15 CPM, great–then buy them for a $10 CPM and keep the rest  Don’t tell us how the sales process is going.  Don’t tell us that your salesfolks are really excited to start selling us. Don’t tell us that your relationships and fancy-schmancy targeting will get us a slightly higher CPM. Just buy our inventory and do whatever you want with it.

By the way, we’re not alone.  And that’s the clue as to how the network market is going to evolve.  One of these months, a big provider like Time Warner or AOL is going to use its capital to nuke the dozens of smaller players– by buying up the inventory of thousands of sites. (Glam and some other aggressive players have already started doing this).  This will sound like a huge risk for them, but it won’t be: All they have to do is deliver on their promises (and cut relatively short-term deals).

Want to sell our ads?  Great.  Tell us you’ll buy our inventory for the next six months, and we’ll be happy to take your call.

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