Reinventing Print Media: IDG's Online Ad Network Gains Traction

Posted by: Spencer Ante on September 8, 2009

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, says 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% this year, says Longo. 20 syndication partners have signed on to the program as well.

“For us it’s been a successful strategy,” says 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% said they intend to work with ad networks this year, a 5% rise from 2008. However, the same survey said 71% of respondents noted that there are now too many ad networks, up from 62% in 2008.

Longo says 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 $8 to $14 per thousand impressions, with some premium channels going for $25 or more. Revenue is split 50-50 with the publishers. Currently, the company has sales people in 9 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,” says 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.

- Spencer Ante also publishes the Creative Capital blog. Click here to see more.

Reader Comments

David King

September 8, 2009 4:48 PM

I think that's a great idea for IDG.

Most side-by-side analyses I've seen of breaking news stories show that blogs are outperforming traditional news in the timeliness, quality, and quantity of coverage.

Not only are blogs attracting eye-balls and topping search results, they also fill a great breadth of niches not covered by media.

Not only will this model help IDG remain relevant, but I think it's a good model for helping make blogs sustainable. Some blogs are profitable, but many provide a valuable service for practically nothing as a hobby.

There's a lot of value in IDG helping them sell advertising for mutual gain.

Joelle Kaufman

September 9, 2009 2:18 PM

IDG is executing exceptionally well on their vertical ad network strategy. They are joined by other innovative publishers and entrepreneurs who aim to deliver the most engaged, targeted audience by carefully curating collections of high quality content from independent publishers. The Adify report (http://www.adify.com/adify-vertical-gauge-q2-200) in August shows that advertisers recognize the value in these vertical ad networks for engagement and brand-building placements by paying attractive CPMs to secure premium placements on these sites. In a continuously growing universe of content, the combination of trusted editors like IDG to select and review independent content with efficient delivery of advertising across many sites is a great combination for brand advertisers coming online in many verticals.

Rick Kestenbaum

September 11, 2009 1:33 PM

In addition to lining up endemic sites, an increasing number of networks are adding contextually targeted pages from exchanges like ADSDAQ, which expands their footprint with desirable premium content from carefully screened non-endemic and long-tail sites.

Tech Publisher

November 5, 2009 12:36 PM

I'm surprised that BusinessWeek would publish anything, even a blog, with such low standards.

No checking with partners or advertisers to see if the network was actually a success?

If they had, they'd have heard that, as soon as the market got really bad in May-June, IDG shifted most of its ads to in-house sites. Partners have been left with less than 25% of the revenue they were getting before. Meanwhile, competitors (no mention of them either) have kept their partners' revnues up.

The IDG TN is just a replacement for FM Publishing's previous blog ad sales. Any partners who are big enough will soon go out on their own and the better mid-sized ones will be picked off by NetShelter and TechVertical.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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