Instead of dumping ad nets entirely (like it should), sources tell us to expect MediaGlow to untangle itself from Platform-A and let third parties in.
TMZ founding editor Alan Citron told us one reason AOL had trouble selling display advertising in 2008 is that its sales force leans too much on Ad.com.
He said there’s a mentality that “whatever you don’t sell will be covered off.”
This got us wondering: Should AOL’s collection of mini-brands and blogs known as MediaGlow stop selling its remnant inventory through AOL’s ad network, Platform-A (formerly known as Ad.com)?
“Of course they should,” Gawker Media sales boss Chris Batty tells us. We listened because Gawker doesn’t run its remnant inventory through ad networks and its ad revenues are over 30% y/y.
Chris gave us two reasons:
- “Ad.com and pretty much every other network out there will tell you they have some technology, some audience centricity, some content matching, some dynamic creative versioning capability. But that’s all a red herring. They are about one thing: exploiting a notion of “inventory” and “remnant” that doesn’t really exist and arbitraging your brand out from under you at pennies on the dollar.”
- “Ad.com is all about delivering bottom of the funnel tactical audience metrics — registrations, conversions. There’s no audience context for that on [a MediaGlow micro-brand like] Joystiq”
We’d also add that cutting ad nets out of the remnant stuff would create scarcity, potentially driving up CPMs for the semi-premium inventory.
But there’s one big reason why MediaGlow won’t follow the Gawker route and stop selling its remnant inventory through ad networks altogether: scale.
As much as remnant advertising may undercut the MediaGlow network’s ability to sell semi-premium inventory at CPMs above a dollar, we hear the remnant stuff still generates hundreds of thousands of dollars per year for even MediaGlow’s smaller sites. Because margins are already tight, MediaGlow isn’t about to leave that kind of cash on the table.
But just because MediaGlow plans to keep selling its remnant inventory through ad nets, it doesn’t mean MediaGlow has to keep selling its remnant inventory exclusively through Platform-A.
In fact, we’re hearing it probably won’t.
Last summer, then Platform-A topper Lynda Clarizio launched something called the Spot Marketplace that opened the Platform-A network to third party ad nets. It never really took off.
Now that ex-Googler Tim Armstrong is in charge, we hear there are plans to revisit and re-emphasise that strategy. For example, expect AOL to turn to Go Fish, an ad net which focuses on tweens and kids, to sell ads against content aimed at kids and tweens.
We’ll go even further.
With a true-believing ex-Googler captaining the ship, don’t be surprised to see MediaGlow untangle itself from Platform-A entirely and join Google’s upcoming advertising exchange instead.
A source with knowledge of the thinking at both companies says the idea isn’t far-fetched.
“It doesn’t make sense to hitch yourself to one method of that remnant,” this source said. “You want the whole the world.”