CBS Interactive Starts Own Ad Network

by Wayne Friedman, Dec 15, 2009, 4:45 PM

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It would seem logical for a major media content provider, CBS Interactive, operating in trying economic times to release a sales tool that brings in extra cash -- wouldn't it?

CBS is actually doing just that by creating Madison, its own in-house Internet advertising network -- and, at the same time, refusing to do business with any of the hundreds of third-party Internet ad networks in operation these days.

And while it isn't new that a publisher gives up ad net money, for CBS' 60 million unique visitors a month, that turns out to be a big deal. Other big publishers like ESPN, Turner, Gawker, and Forbes, have for some time, also refused all business from the ad nets, while Time Inc. is down to using one.

Traditional TV operations would never allow this to happen -- because of what strategists say has been the long-held threat of commoditizing their business.

Of course, the Internet has always been another animal -- producing a seemingly unlimited supply of advertising avails, a virtual breeding ground for the commodity theory.

Like many others who use Internet ad networks, CBS has seen much lower pricing for Internet inventory in terms of cost per thousand users (CPMs), versus the pricing -- usually for its prime inventory -- it gets.

Traditional TV operations -- particular cable networks -- are similar in this regard to the Internet: they have a big supply of avails they can't always sell, so they let others handle some of these duties. This is especially true of overnight and daytime periods.

To help ease the sales process, many cable networks give up huge chunks of programming/content time to infomercial producers, making "program time sales." More recently, a number of cable networks have been letting Google TV Ads try its hand at selling remnants time periods.

With its anti-ad-network stance, CBS Interactive seems to be taking a different turn. It has been a firm believer in giving its content the widest possible distribution (as opposed to those who subscribe to the Hulu.com, more narrow-distribution approach.) But now it wants contraction when it comes to selling.

In the end, it's about making inventory more valuable -- if not giving those areas which already get good pricing, the ability to gain greater worth.

But, no matter what, there'll always be some content not selling as well as other content. Solving that problem comes down to good salesmanship -- which CBS Interactive hopes its salespeople have, as CBS does with its traditional TV businesses.

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0 comments on "CBS Interactive Starts Own Ad Network ".

1. Paula Lynn from Who Else Unlimited
   

   commented on: December 15, 2009 at 5:53 p.m.

   It will also depend how the sales departments are managed and how the salespeople and managers are paid. Revolving doors in such situations are not uncommon which influence control of profitability.

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