May 29th, 2008 | Media 2.0 | 1 Comment
Matt Marshall over at VentureBeat is reporting that Glam Media — an advertising/content network focused on sites that appeal primarily to women — has turned down a $1.3-billion acquisition offer from an unnamed party. Like Caroline McCarthy at Webware, I assume that this offer likely came from an “old media” company such as CBS (which has been snapping up digital properties like Last.fm) or possibly a large advertising player. But seriously, $1.3-billion? And Duncan Riley says this isn’t even that great an offer when you consider that Glam has gotten four rounds of financing totaling about $115-million.
There’s no question that the Glam Media story is an appealing one: the company says that it has more than 65 million unique visitors across its network — although as Mike Arrington has pointed out in the past, that figure is an aggregation of all the visitors who come to any of Glam’s partner sites. He also noted in that post that Glam owns a bunch of pure SEO plays such as free-beauty-tips.com and so on. In a previous VentureBeat story, one critic called Glam “Boo 2.0,” referring to the Bubble 1.0 shopping site — and Matt Marshall noted that half of Glam’s total pageviews came from a single site (MyYearbook.com).
Still, the network has grown at a fairly impressive rate, and counts some prominent sites like E Online as partners — and has just launched a fairly sophisticated video content/advertising system as well. According to PaidContent, the company gets a whopping $50 CPM on some of its video ads. But to turn down a $1.3-billion takeover offer? Either Glam’s financial backers have gotten greedy, or someone has been drinking an awful lot of Web 2.0 Kool-Aid.
Mar 29th, 2008 | Media 2.0, Social Media | No Comments
We’re long past the writing-on-the-wall stage for newspapers and advertising, it seems — the recent report from the Newspaper Association of America is more like a billboard, with one of those huge searchlight things they use for movie premieres and the opening of new car dealerships. And what it says is (pardon my French): You guys are totally screwed. Advertising has been declining for the past few years or so, but now the NAA is talking about the biggest decline since the association started keeping data — bigger than after September 11, 2001.
Some of that (full data here) is undoubtedly a result of the U.S. economic situation, which has everyone from banks to car dealers pulling back the reins and spending less. But the uncomfortable reality is that advertising in newspapers is declining for a bunch of other reasons as well, including the fact that newspapers appeal primarily to an aging population. At a recent meeting at one newspaper, an editor said that she felt a piece on hip-replacement surgery should be played more prominently because “that’s our core demographic.” Sad, but true.
But an even more important reason why paper ads are declining is that their cost-to-value ratio is way out of whack with what advertisers can get elsewhere, particularly the Internet. And it’s not just Craigslist.org decimating the classified business. Even traditional newspaper ads are difficult (if not impossible) to measure. Online ads can not only be targeted more specifically, they can also be tracked a dozen ways, and it quickly becomes obvious which ones are working — plus they are an order of magnitude cheaper than the paper version.
The NAA’s press release, of course, focuses on the much more positive news that online advertising for newspapers continues to grow at double-digit rates — but it still only accounted for revenue of $3.2-billion, compared with overall print revenue of more than $42-billion. It’s going to have to start growing a heck of a lot faster than that before it even starts to make a dent in the decline of print advertising.
Mar 24th, 2008 | Media 2.0, Social Media | No Comments
There’s been lots of talk recently about the value of ad networks, including a recent piece in MediaWeek about how ESPN has decided to opt out of the ad network game. The central question seems to be: Are ad networks a great way to package up unsold Web inventory and monetize it, or do they take traffic away from a brand and potentially interfere with that brand’s ability to market effectively to its audience? It may not help, but I would say the answer is probably yes to both of those questions.
Aggregating space on blogs and other sites that could have value to advertisers makes sense, and that’s presumably why Forbes is setting up a blog network, and why Federated Media is also in that business — which John Battelle talks about in a Q&A here, and why large-scale blog networks like b5media exist as well (in the interests of full disclosure, I should note that I am part of the new Forbes blog network). At the same time, however, it’s not at all clear whether such networks can ever really compete with algorithm-based and search-targeted advertising.
If that’s the case, wouldn’t it be better for a brand — such as ESPN — to focus on building a better relationship with its core audience, rather than running ads from some ad network that may or may not be relevant, and could take eyeballs elsewhere, all in return for a crappy CPM rate? That’s obviously the conclusion that ESPN has come to, and others have as well. To some, chasing the low returns of ad network banners isn’t worth the investment. Others, however, will see it as better than nothing — particularly if it involves inventory that’s going to go stale anyway.
Maybe it’s just the spillover from the sub-prime mortgage meltdown, but in some cases packaging remnant inventory and selling it through an ad network reminds me of the Wall Street practice of bundling underperforming or questionable mortgages together, and “securitizing” them in order to unload them onto outside investors. That kind of strategy works really well — right up until it doesn’t.
Nov 21st, 2007 | Media 2.0 | No Comments
Yet another in a long (and I mean long — we’re talking a decade or so) line of depressing declines in newspaper advertising levels, as detailed in a release by the Newspaper Association of America and in this Reuters story. And just to add insult to injury, Alan Mutter of Newsosaur notes both on his own blog and at Silicon Alley Insider that it’s even worse when you take inflation into account. I bet Alan is a lot of fun at parties.
As the Reuters story notes, there is some good news — while regular print advertising fell by 10 per cent in the third quarter, online ads rose by about 21 per cent. That’s good, right? Sure. Except for the fact that online advertising only amounted to about $770-million, and traditional newspaper ads accounted for more than 10 times that amount or about $10-billion. That’s a pretty dramatic gap, as Scott Karp of Publishing 2.0 has pointed out before — something he calls the “10-per-cent problem.”
Nov 20th, 2007 | Media 2.0, Social Media | No Comments
BusinessWeek magazine has a piece about user-generated content and how it’s old and busted now — people really want professional content, apparently. As proof that “one after another,” video sites are turning their backs on UGC and going steady with the pros instead, BusinessWeek gives us one example: Mania.tv, which recently refocused and got rid of the user-generated part of its model, which apparently never really drew that many viewers.
Of course, it’s possible that Mania either didn’t approach that part of its business properly, or didn’t bother looking for the diamonds in the UGC rough — or maybe people were too busy uploading their stuff to YouTube and DailyMotion and Metacafe. It’s tough being third or fourth to the party, as a number of commenters have pointed out on Lost Remote.
The thing that really bugs me about the BusinessWeek article is that there’s this false dichotomy between high-quality professional content and low-quality UGC crap. It’s not that binary, I would argue. It’s more like a spectrum, with professional content on one end, and as you move down the scale you get lower quality, until there’s your brother-in-law singing karaoke.
Is there a lot of UGC crap that only someone’s mother would watch? Sure there is. But there’s a lot of garbage produced by “professionals” that gets foisted on people through traditional media too, whether they want it or not. I’d take some half-decent UGC over that any day.
