Web sector more upfront about ad sales


NEW YORK -- Two years ago, MSN's sales team began talks with retailers in the spring about locking up key ad slots for the holiday shopping season. Last year, those conversations were pushed up to February.

Now, according to Mike Hard, vp U.S. online ad sales at MSN, his team is spending this holiday season talking about the next one and in some cases selling inventory a year or more in advance.

The flurry of advanced selling is indicative of an emerging trend in online advertising, a business typified by perpetual media planning. Even as the medium continues to expand and fragment, and as the industry preaches long tail and audience aggregation, sellers from top sites say that many brands have been pushing for more upfront-style buying.

Many note that such categories as retail, pharmaceuticals, travel and packaged goods are following the lead of the automotive business, which for the past few years has seen advertisers commit significant portions of their budgets to the top handful of publishers in each segment on a yearly basis.

Several forces appear to be propelling this trend. The Web is becoming a more crucial ad vehicle for traditional brands, and thus the dollars are getting more serious. (eMarketer predicts 29% growth in 2008.) And, as many categories grow more competitive, brands risk being shut out of the most desired inventory if they don't move quickly.

"We've definitely seen some pretty dramatic changes in the way people are doing upfronts," Hard said. "It's been particularly dramatic in the last three or four months."

That's not to say the Web is going the way of TV and brands will soon be dumping two-thirds of their budgets for the year during a single week in May anytime soon. Rather, sellers say online advertising's version of an upfront turns the old model on its head.

"What's different is that advertisers are leading the upfront instead of the publishers," About.com CEO Scott Meyer said. "They are inviting their key publishers in. It's flipped around."

As the number of pages consumed on the Internet continues to grow, particularly with the explosion of user-generated content, there is no shortage of inventory. But, "there is not lots of quality out there," Meyer said. "It's mostly low-rate, undifferentiated stuff. Marketers are realizing that quality stuff is going earlier and earlier."

The quality of inventory that tends to go early, according to sellers, is super-targeted content (like the Web pages related to specific car models ), home-page avails, video and those ever-elusive "big ideas" that clients always seem to want.

"More advertisers want custom packages," said About.com senior vp sales Sheryl Goldstein, who spent the past several years at AOL. "And the only way to do that is selling upfront."

One publishing segment where upfront selling is becoming prevalent is health, as online marketing becomes increasingly crucial to the pharmaceutical industry.

Greg Smith, COO of Neo@Ogilvy North America COO, said that several years ago, he was encouraging pharmaceutical clients to sign deals with top health publishers like WebMD for as long as three years "to grab every single cholesterol impression out there."

Michael Keriakos, co-founder and executive vp of Waterfront Media, the parent company of Everyday Health, said that for the first time his company was invited this year to several advertiser-led upfront events. As a result, the company has already locked up 35%-40% of its revenue goals for 2008.

WebMD president and CEO Wayne Gattinella said his site's experience was similar and that several brands committed 2008 budgets by September. "That was earlier than any time previously," he said. "I wouldn't categorize it as a tidal wave. But these are large commitments of scale."

Beauty also is buying in early, according to Tessa Wegert, interactive media strategist at Enlighten. She said that for her client Kao Brands (Biore, Jergens), there are two or three core beauty sites, including Style.com, that have become must-buys, and competition is fierce.

"In the last few years, we found that we need to be buying way in advance of when we would for other clients," she said.

Yet some buyers remain skeptical of this trend. In fact, many bristle when the word "upfront" is even uttered. Regardless, the consensus is that as online advertising matures, it's become somewhat more cyclical.

"Buying and selling is getting a little bit less crazy than it was," said Jeff Ratner, North American digital director at MindShare Interaction. "But there is still a lot of opportunistic buying."

MediaVest's Amanda Richman, senior vp and director of digital services, wondered whether some sellers were overstating the importance of such upfront events. For digital buyers, "it's a 52-week upfront," she said.

Mike Shields is a reporter for MediaWeek.