Disney's SOAPnet Adds To The Ad Net Glut
This story was written by David Kaplan.
Another day, another media company forms an ad network Disney's (NYSE: DIS) SOAPnet is the latest to start its own vertical ad net. Disney plans to announce Wednesday that the companion site for cable net SOAPnet has deals with 45 smaller, similar sites, which will run SOAPnet's videos and news and allow it to sell ads for them as well, according to WSJ, which uses the news to highlight the ad net glut.
-- An act of survival: The Journal describes SOAPnet's creation of an ad net as an act of survival: traffic is low and trending lower, so it hopes that by increasing its reach with a slate of related sites, it can continue to attract ad dollars. For example, SOAPnet and its network relative ABC Daytime, had a combined 1.2 million uniques in March. That's a 24 percent drop from March 2007, according to comScore (NSDQ: SCOR). SOAPnet hopes it can not only stop the slide but double its traffic by aligning with dozens of other sites, such as BeautifulStranger.TV and Stylehive.com.
-- The ad net crush: Lehman Brothers analyst Doug Anmuth posited last week that media companies are making a smart decision in starting ad nets. Doing so enables them to take advantage of rising online ad spending. It also helps them extend the reach of their brands, though some, like WashingtonPost.Newsweek Interactive and ESPN have not felt the value as much and have backed off the ad net model. With that in mind, small publishers have little to lose by handing their ad inventory over to larger brands to sell on their behalf. However, the ever-rising number of ad nets - WSJ estimates there are 300 "majors" in operationthe overlap is becoming so great among various ad nets that some are selling the same ad slots. As a result of the crush, ad nets may be starting to experience reduced saleswhich means consolidation is around the corner.
By David Kaplan