• by Steve Smith , Staff Writer @popeyesm, June 23, 2008

Big media brands brand themselves vertical 

The trend du jour is for big branded media companies like Forbes, Martha Stewart Living Omnimedia and CBS getting into the vertical network game by leveraging their existing sales staff across scores or hundreds of like-minded smaller sites. MSLO even dubs its group of blogs and enthusiast destinations "Martha's Circle." While some in the industry question the viability of the models, the older media companies may enjoy a natural advantage. A Collective Media survey found that 50 percent of Fortune 1000 marketers say they are more likely to buy from a media branded vertical than from a generic. And on the publishing side, many of these niche partners see in the branded networks a more lucrative and prestigious alternative to Google AdWords.

But are the major media brands rolling up blogs of varied quality and questionable user loyalty simply to achieve quick scale? "Are they doing it because they see additional value to offer advertisers or to beef up their reach?" wonders Good Health Advertising CEO Robert Kadar.

There may also be inherent conflicts of interest to the model. If a branded media sales team is working both for the high CPM core property and a lower value network, whose inventory gets sold first? Hachette Filipacchi, which publishes Car and Driver and Road and Track, also owns the Jumpstart auto site network. After purchasing the network, however, HFMUS kept it as an independent operation, which helps insulate the network from claims it favors its own brands. "It allows us to maintain a Switzerland approach with all our publishers," says CEO Mitch Lowe. 

The perception in the publishing market is that it is easy and cheap to roll your own network. Service providers like Seevast's SyndiGO and Adify build these networks for many like MSLO and MSNBC. But making vertical networks a turnkey solution also raises questions about the seriousness of the endeavors and the curating of aggregated content. "I think the brand extensions might work as a short-term play, but the reader of a blog site is very different from the reader of a Martha Stewart site, and the advertiser will eventually see right through that," says Travel Ad Network CEO Cree Lawson.

But networked advertising is not the only strategy at work in both old and new vertical nets. Many of them fancy themselves new-style media companies that create new distribution channels that bring professional media out into the long tail. MSNBC formed two vertical networks around its political content and around the Today brand. It now uses these confederations of allied small sites as a way to redistribute its own branded content.

 In fact, many of the old-line players in the vertical ad network space are repositioning themselves as "media networks." The raw numbers suggest they are major content hubs. Travel Ad Network has 12.5 million uniques and NetShelter has 8 million, putting them high on comScore charts. Glam Media, the poster child for the new media model, had 34 million uniques in March 2008. "We view ourselves as a distributed media network," says Scott Swanson, Glam Media vice president and general manager of the Glam Media Publisher Network. While the network comprises 500 sites, it also syndicates content from branded media like Hearst magazine sites and tvguide.com. "Our advantage as an ad network is we can marry sponsorship with content," he says, and pull partner content into more creative and richer environments. "We are starting to view Glam as a kind of hybrid ... from a broker of ad inventory to a manager of content that is sponsorable," Swanson adds.

"We view ourselves as a record label," says Peyman Nilforoush, CEO of NetShelter Technology Media. The company just hired the former editor-in-chief of CNET, for instance, to manage and advise the publishers. Like Swanson, Nilforoush sees his model evolving from ad brokering to cultivating niche publishers as labels do bands. "As the artist grows, so does the label." 

A media 3.0 model may acknowledge that no set of static content brands can hope to keep up with the dynamic tastes and traffic of an interactive platform. It may take a media network model where old brands create alliances with an ever-changing portfolio of niche talent. Is this the birth of open source media?