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Advertising - Monday, August 13, 2007

Glam Media: Publisher or Ad Network? Does it Matter?

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We just finished reading lengthy profiles of Glam Media on Techcrunch and VentureBeat that give us the news that Glam Media is looking to raise $200M in a round organized by Allen & Co. We get some strong efforts by both sites to crunch the numbers on the question of whether Glam Media is an ad network, a destination site or both. Does it matter? It would if the market didn't value an ad network as highly as it does a portal. But that doesn't seem to be the case with ad networks being a hot commodity.

The controversy, in a nutshell, is that Glam Media boasts of a wave of rising traffic to its network. However, because the company doesn't own most of the sites that it counts traffic on it shouldn't boast that it is bigger than iVillage or growing faster than MySpace. It's a fair enough beef. We suspect Glam blurs the lines for PR reasons which would raise more awareness with advertisers and its probably been an effective strategy even if it has had some blowback.

What really matters, however, is can Glam sell ads and get good performance on those campaigns so that advertisers will return with bigger campaigns. Glam has to continue to feed that growing beast that is its publisher network or it will lose them.

It appears that Glam has strong brand ad sales people. It's less clear what if any technology Glam has to juice stronger performance. VentureBeat reports that Glam is set to close a $1B ad deal. This is a staggering number for an advertiser to commit to. We can't imagine that any advertiser or network would sign off on such a deal without knowing where their ads would run and without having run tests to verify performance.

A number of readers comment that they can't understand why Glam would require $200M. We expect they might a) buy some of the sites in their network b) invest in or buy behavioral ad technology to improve performance c) management might even sell some stock to investors.

Read - VentureBeat post
Read - Techcrunch post

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