So you're a "traditional" media company. You watched as attention shifted toward a more fragmented new-media landscape. The attention shift on its own is not nearly as big a deal as an outsider might think, because you knew a little secret: As long as brand dollars stayed with those media outlets where it felt safe, Google and its algorithm-based ilk could have the direct marketing budgets of the long tail, and you would be just fine.
But recently things have started to change. You've grown increasingly aware that brands are considering allocating budget to ad networks as they are forced to follow attention. It's still not that big a deal yet numbers-wise, but it's starting to become a growing concern. Ad networks are trying to appeal to brands, and brands are listening more. What's worse is that some of these ad networks are using the fact that they represent properties you own to sell brands (see Mike Shields' piece, "ESPN Turns Off Ad Nets"!)
As a traditional media company, you have assets that the ad networks don't. Most importantly, you have the resources and the know-how to sell brand advertising. As Wenda Harris Millard, former Yahoo exec and current president of media at Martha Stewart Living Omnimedia Inc, might put it: as a "publisher" you are a trusted "brand steward" -- and the algorithm and its many nameless destinations is most certainly not! So what do you do? Start an ad network!
As Anick Jesdanun reports in his piece "Media cos. battle Web portals on ads," more and more media companies, including most recently Forbes Inc., have taken the approach of representing top-tier, quality new-media properties in their vertical to sell brand advertising against.Funny thing is, I think this approach just might be crazy enough to work.
We know the argument for the algorithm: new media is too fragmented. You will have to have a technology solution in order to reach the far corners of the Web. I agree with this in principle, but who needs those anyway. Let's look at why the media companies' strategy of network creation WILL win.
Millard is right -- traditional media publishers have been, and continue to be, brand stewards. This means they foster the creation of content that will attract people's attention, understand what it takes to make it brand-safe, and in the end create the market for building brands.
Many long-tail publishers have neither the inclination nor the ability to be brand stewards. Even if Google, or some other ad network, can create the perfect formula for placing brand advertisements, there is no reason to think publishers who utilize ad networks will be brand stewards. Even if they wanted to, production of brand-building quality content is expensive -- and not a science.
All traditional publishers have to do for new media is what they have always done in their own media: namely, identify quality content that will both attract audiences and be brand-safe, helping to package, market and distribute to people and brands. These media-company-run ad networks will only work if the media companies play a much larger role in development of partner publisher sites. For media companies to succeed as ad networks, they must be a value-added ad network to their new-media partners. This might mean help with resources, editorial, traffic generation, branding, content, you name it (see Real Girls Media, a new ad network, as a good example of what I would call a "value-added ad network"). To do all this, they may very well need to take investment stakes, becoming a holding company for new-media properties that they don't just place bets on, but actively take a role in trying to build up above the noise of the long tail. These efforts will result in a new class of new-media properties, represented by those media companies with the right DNA to be brand stewards.
The biggest reason I think media ad networks will work (assuming they look to ad value beyond just revenue to their publishing partners): I have always maintained that those that look first to address the quality of experience for people consuming content through any given medium are best equipped to monetize that medium (a la Google for search). Combined with their depth of knowledge for the brand ad sale, if media companies can help improve the quality of content people get online (I think Forbes has a number of ways they could help their new network of publishers), then they will, indeed, be best positioned to monetize.