AOL’s Self-Serve ‘Ad Desk’ To Be Focal Point For Display Efforts
Two months after dropping hints about a new ad platform, AOL (NYSE: AOL) is now opening up beta testing for Advertising.com’s “Ad Desk,” a self-serve display sales option aimed at agencies and marketers. In an interview with paidContent, Jeff Levick, AOL Advertising’s global head, said that Ad Desk would be at the center of all new display products that the company would be developing from here on in. By making this announcement, AOL is also placing renewed emphasis on the Advertising.com brand. It also updates AOL’s ad offerings at time when ad exchanges and demand side platforms are taking a larger role in online media buying. The purchase of Ad.com in 2004 was one of the first moves the previous guard at AOL undertook when it began to remake the company from an internet access provider to a an ad-supported media company within Time Warner (NYSE: TWX). After that point, AOL acquired half a dozen ad companies to build its ad business. Under CEO Tim Armstrong and Levick, AOL has sought to refocus its ad efforts to emphasize premium ad sales in addition to handling the cheaper remnant inventory. The promise of Advertising.com Ad Desk, Levick said, is that ad agencies and will be able to are now able to directly manage campaigns. The product is also intended to make buying inventory across AOL properties and the Advertising.com network more appealing as well.
Read More: PaidContent.org
What Online Advertising Can Learn From TV Upfronts
Amid the current all-consuming obsession with real-time bidding, hyper-targeting and other buzzwords, it may seem something of an anachronism to pause and reflect on what lessons we in online advertising might learn from TV’s upfront marketplace. But there is a reason it works for TV. And those same reasons could help brand dollars flow online. This type of forward buying of media is so common because it accommodates the way large consumer products companies actually run their businesses, with complex operating structures and supply chains. These same companies spend the majority of total brand advertising dollars — exactly those elusive brand dollars that have been so relatively slow to come online. So, regardless of our ever-increasing “share of audience time,” we in the online ad industry simply won’t get that money if we continue our exclusive obsession with capabilities that are exciting, but constantly changing — and may not actually serve the largest marketers. To get these brand dollars, we must accommodate consumer product companies’ need to plan ahead with scalable, predictable forward media-buying capabilities: It’s time for an Online Media Futures exchange.
Read More: AdAge
Hearst Near Deal For iCrossing
Newspaper-and-magazine publisher Hearst Corp. is near a deal to acquire digital-marketing firm iCrossing, according to people familiar with the matter, the latest sign of how publishers are going head to head with Madison Avenue to grab some of the growing revenues from online advertising. Under the deal, which is in the final stages of negotiations, iCrossing, one of the nation’s biggest independent digital-marketing shops, is likely to fetch about $375 million, plus bonus payments if it reaches certain targets, these people said. Digital-marketing firms help companies pitch their products on the Internet, via cellphones and through other interactive channels. They have attracted particular interest from ad agencies and others as marketers shift more of their ad dollars from traditional media to the Web.
Media-buying company Zenith Optimedia, a unit of Publicis Groupe, predicts global online-ad spending will rise 12% next year to $60 billion. Magazine publishers have become more deeply involved in the online-ad business in the past few years, with companies such as Advance Publications’ Condé Nast and Meredith Corp. snapping up small ad and technology firms. ICrossing, whose clients include Travelocity, Coca-Cola and Toyota Motor, has about 550 employees specializing in Internet-search marketing. In the past few years, it has acquired several digital-marketing companies to expand into other areas, such as marketing on social-media sites and Web analytics, or measuring, collecting and analyzing Internet data to aid in ad targeting.
ICrossing is led by Chief Executive Officer Don Scales, the former CEO of Omnicom Group‘s Agency.com, and Chairman Richard Rosenblatt, former chairman of social-networking site MySpace. One person familiar with the matter cautioned that iCrossing, which is based in Scottsdale, Ariz., could still decide to remain independent if it doesn’t attract the right price. “ICrossing has spoken to and has entered into nondisclosure agreements with many companies during the process of evaluating our position in the market. It would be inappropriate for us to comment on any of these discussions,” an iCrossing spokesman said. A spokesman for Hearst said: “We engage in many explorations, but as a matter of policy don’t comment on possible transactions.”
The know-how to create digital promotions for marketers represents a new source of revenue for magazine publishers and puts them increasingly in competition with Madison Avenue firms. Earlier this year, Chrysler picked Meredith to handle the auto maker’s direct-mail, email and social-media marketing—work previously done by Omnicom’s BBDO. “Having media owners winning agency business requires that we step up our game,” says Matt Seiler, chief executive officer of Universal McCann, an ad unit of Interpublic Group. “We can no longer assume that we own the relationships” with marketers, he said.
The new model is starting to become something of a lifeline for publishers amid industrywide declines in print-advertising revenues. For publishers, who are trying to adapt their businesses and content to devices such as Apple‘s much-hyped iPad, digital-marketing expertise is crucial. Hearst sparked the iCrossing negotiations late last year when it made an unsolicited bid for the firm, according to a person familiar with the matter. At the time, iCrossing’s board said the offer—around $250 million—was too low and decided to open talks up to other possible buyers, this person said. ICrossing went on to hire an investment bank and has held talks with several potential suitors, including Dublin-based ad giant WPP PLC; Dentsu Inc., Japan’s largest ad-holding company; and Aegis Media, a unit of Britain’s Aegis Group PLC, said people familiar with the situation. These people said WPP, Dentsu and Aegis are no longer interested in acquiring the firm, with several executives saying iCrossing’s asking price was too high. Closely held iCrossing, which is backed by Goldman Sachs Group Inc. and venture-capital firm Oak Investment Partners, has been seeking more than $400 million from bidders, according to several people familiar with the matter. Ad executives predicted it will more likely draw about $300 million.
In January, Dentsu acquired Innovation Interactive Inc., a New York digital advertising and marketing firm, for about $200 million. Late last year Cheil Worldwide, the largest ad company in South Korea, acquired Boston-based digital-ad firm Barbarian Group. Ad executives expect a broader wave of consolidation to ripple through the advertising market this year as the recession eases.
Read More: WSJ (Paid)
