Media Giants Compete For Online Ad Dollars

Martha Stewart makes an appearance at Macy's in New York's Herald Square in this March 16, 2008 file photo. Martha Stewart Living Omnimedia Inc. has reached out to dozen or two leading lifestyles sites that meet the company's editorial standards and selling higher-priced ads to Macy's, Ace Hardware and other brands.
AP Photo/Peter Kramer, file
Traditional media companies trying to stem the flow of advertising dollars to Google and other large Internet companies are increasingly building ad networks of their own, anchored by their brands.

The latest, Forbes Inc., announced Monday that it will start selling ads this spring for about 400 financial blogs. In recent months, Conde Nast, Viacom Inc., CBS Corp. and other major media companies also have unveiled topic-specific ad networks to lure advertisers that want to buy more ads than any single site can sell.

If newspapers, magazines and broadcasters cannot expand online ad inventory, they are "under threat of becoming less and less relevant to the advertiser," said Russ Fradin, chief executive of Adify Corp., whose technology runs ad networks for Forbes and others.

But these media networks - some linking fewer than a dozen hand-picked Web sites - may have a tough time competing with the larger networks of thousands assembled by Google Inc., Yahoo Inc., Microsoft Corp. and Time Warner Inc.'s AOL.

Those companies have been expanding, too, spending at least $11 billion collectively to buy smaller ad networks and technologies - and in Microsoft's case, also bidding more than $40 billion for Yahoo.

"As our technology has continued to advance, we've gotten better and better," said Lynda Clarizio, president of AOL's emerging Platform A advertising unit. "We can handle a lot of demand from advertisers."

The expansion drive by both sides comes as Internet users increasingly divide their time across scores of sites large and small. Advertisers would rather not deal with thousands of individual Web sites. Media companies and Internet portals alike are promoting networks as a way to reach larger audiences with "one-stop" ad buys.

So far, the portal ad networks have largely succeeded in selling their affiliates' leftover ad inventory at discounted rates and sharing revenue.

  • MARTHA STEWART LIVING OMNIMEDIA INC. - Martha's Circle launched in November with about a dozen food and lifestyles sites, including Apartment Therapy, The Wednesday Chef and Style Me Pretty. Initial advertisers include Macy's, Ace Hardware and Bank of America.
  • VIACOM INC. - In February, Viacom expanded Nickelodeon's ParentsConnect Network with the purchase of Baby Names World and other parenting sites from Babunga. ParentsConnect also has independent Web sites such as GreatSchools. Viacom plans additional offerings this spring, including a music ad network anchored by MTV, VH1 and Country Music Television and one for men's lifestyles anchored by Spike TV and Comedy Central.
  • FORBES INC. - Forbes' Business and Financial Blog Network, announced Monday, involves about 400 prescreened blogs that will start carrying advertising sold by Forbes this spring. Initial participants include Xconomy and Talking Biz News.
  • CONDE NAST - The magazine publisher's CondeNet division, which operates such sites as Wired and, has been selling ads for about a half-dozen blogs on technology and fashion, including The Sartorialist. Unlike most other networks, CondeNet considers the blogs an extension of its properties, so advertisers pay full price regardless of placement. The blog sales began last year.
  • CBS CORP. - Television stations owned by CBS Corp. are connecting with local bloggers to share news and advertising. Ad networks have been rolled out in several cities, including Boston, Dallas and San Francisco, with others to follow. The CBS effort launched last week.
  • MSNBC.COM - This joint venture between Microsoft Corp. and General Electric Co.'s NBC has created two ad networks. One is with political blogs such as Political Wire and Outside the Beltway. The other is centered on the "Today" show, with such women-oriented sites such as Families Online Magazine running ads and content from MSNBC. The program, which launched in August, has more than 400 sites across the two networks. Other networks are being considered for entertainment, travel and other topics.
  • THE WASHINGTON POST CO. - The Post's Blogroll program signed up about 150 blogs that focus on business, technology, money, travel and the environment. With a launch in November 2006, Blogroll was one of the first ad networks from a traditional media company. Post officials decided in mid-March to shut it down, however, because of growing competition. Existing participants are allowed to continue.

    Now, by employing targeting techniques such as matching ads to visitors' surfing habits, those large networks also are stepping up their bid for higher-value ads - the ones that have traditionally gone to sites run by the media companies.