Feeling Frothy?

Is it plausible that there isn’t enough advertising space in limitless cyberspace? Credible people are saying just that, provided the word “premium” is inserted in from of advertising. MediaPost reports today that a snapshot of media sentiment indicates that the market for online ads will remain strong, with prices rising and money flowing, into the fourth quarter and the start of next year.

The report is based on interviews with 87 media executives culled from the MediaPost advisory panel, so scientific this is not. Nevertheless, the report says:

“Our respondents supported our thesis that the branded advertising pricing environment continues to strengthen for publishers, as rising demand levels coupled with supply constraints for premium inventory appear to be giving publishers pricing power.”

Ahhh, pricing power. Is there a sweeter euphemism in the business lexicon? And before you dismiss the MediaPost tidbit as wishful thinking, consider this introductory paragraph to Business Week online’s report on the sale of Weblogs, Inc. to AOL.

“Jason McCabe Calacanis had an enviable problem. Advertisers eager to reach niche audiences were banging on his door. But the CEO of Weblogs Inc., a collection of 90 blogs, didn’t have enough front-page space to sell them. Calacanis huddled with investors to devise a plan to scale up the business. Instead, on Oct. 6, he sold Weblogs to America Online Inc. for a reported $25 million.”

Calacanis didn’t have enough front-page space — another way of saying not enough premium space, because he had established a premium channel — and so he was “forced” to sell an operation whose cash flow had to be sparse, according to my back-of-the-envelope analysis.

How sad.

Well, not really. In fact the current environment makes this the perfect time to launch a high-profile online publication like Pajamas Media, a blog cabal that I referred to some months ago. CNet says Pajamas “will offer original content and links to affiliate sites written by more than 70 bloggers, as well as basic news feeds from sources like The Associated Press.” The roster will include well-known conservative commentators like Glenn (Instapundit) Reynolds and Charles ( Little Green Footballs) Johnson, along with writers from established mainstream media.

CNet says Pajamas “could be seen as competing with the Liberal Blog Advertising Network. That site allows advertisers to place ads on more than 70 “liberal and progressive blogs”.” (Note, the CNet link was broken when I tried it but I believe CNet was referring to the BlogAds product and so I have linked accordingly).

Speaking of BlogAds, a recent item in Paid Content noted how, during a panel discussion hosted by BlogAds founder Henry Copeland, this testimonial was forthcoming. (Quoting Paid Content) “When Brian Clark’s agency GMD Studios ran an Audi campaign, the one-half of one percent of the media buy he placed on BlogAds wound up accounting for 29 percent of the traffic to the campaign page.”

The message being that people are involved with what they read online, and thus online advertising is more effective. Let us hope that is a correct assumption, because a lot of bets are riding on it.

Tom Abate
‘Cause if you ain’t Mass Media, you’re Mini Media