news analysis Everyone knows the print media is in a world of hurt. The more difficult question is this: What do publishers do about it?
Technology publishing giant IDG just may have come up with one killer idea. And no, the answer does not involve scantily clad women or slide shows touting the best nude beaches.
For IDG, the publishers of hundreds of magazines such as PC World and Macworld, the answer was to go against one of the industry's most sacred notions and create its own online advertising network--with a major twist. Instead of only selling ads for its own properties, IDG would take advantage of the media's fragmentation and the shift to online advertising by selling ads for other new media properties.
In addition, the network also helps IDG Web sites to grow their audience by syndicating their content across the Web to non-IDG properties. (BusinessWeek, for example, syndicates IDG content on its Web site.)
It's a bold strategy that seems to be paying off. Peter Longo, CEO of IDG Syndication and Networks, said that its network is currently serving ads to a combined total 75 million unique monthly readers, up from 20 million 18 months ago when it launched the group.
Currently, IDG works with about 200 Web sites, including GigaOm, Slashgear and Xconomy.com, with plans to expand to 300 sites. All told, those sites serve up nearly 750 million ad impressions per month. Revenue is forecast to grow 100 percent this year, said Longo. Twenty syndication partners have signed on to the program as well.
"For us it's been a successful strategy," said Longo, a veteran tech publishing exec who used to work at Ziff Davis and CMP Media. "It's a way to make a leap from our deep technology past to our Web-based future. You don’t have to own all of your content."
Sure, the online ad network market is as crowded as Grand Central Station during rush hour. But the networks continue to grow as advertisers seek to reach specific groups or audiences across the Web. IDG competes against many networks, including bigger companies such as AOL and Yahoo, and smaller networks such as NetShelter Technology Media and Federated Media.
Among nearly 500 people polled in Collective Media's May 2009 survey, 89 percent said they intend to work with ad networks this year, a 5 percent rise from 2008. However, the same survey said 71 percent of respondents noted that there are now too many ad networks, up from 62 percent in 2008.
Longo said IDG Syndication and Networks is trying to gain an edge by offering higher-than-average ad rates, a focus on premium technology content and a global reach. The average rate it charges is US$8 to US$14 per thousand impressions, with some premium channels going for US$25 or more. Revenue is split 50-50 with the publishers.
Currently, the company has sales people in nine countries, including India, Japan and Korea, with plans to expand to 14 countries. It's expensive but it allows the company to charge higher ad rates to local businesses. "We don't want to become the biggest network per se," said Longo. "We want to be the largest network for technology."
It won't be easy to grow its ad network with new competitors popping up every day, and brands cutting the number of ad network partners they work with. But IDG seems to making headway by rethinking some of the industry's most sacrosanct notions and coming up with a unique formula in an increasingly crowded space. Desperate times call for desperate measures.
This article was first published as a blog post on BusinessWeek.
Play video
There are currently no comments for this post.