Digital Directions: What kind of members are in the co-op?
Kowl: We have about two dozen independent publishers equaling 175 websites and blogs. We are nearing 40 million monthly traffic overall. It appears that we'll pass 200 websites by the end of February. The vast majority of publishers we're working with and talking to have sales under $30 million.
About two-thirds of the publishers are selling their own advertising. Some of them can get CPMs of $30, $50, $100 or more when they sell their own space; but, when they have unsold inventory, they have only two options: house ads or low-priced remnant ad networks. We see a third alternative, which is to fill unsold space at more respectable prices through partners in the co-op. The remaining one-third, which rely on networks, will get higher rates by partnering with b-to-b sites that sell direct.
We also have our own rep selling the network, and we're partnering with Ad Sales 360°, Bizo, TDP (The Digital Partnership) and Undertone.
Digital Directions: How does this work for publishers?
Kowl: It's all about audience. Each b-to-b website serves a niche audience that advertisers want to reach—but you never have everyone. As a seller, you will be able to add tens of thousands or hundreds of thousands of similar-quality audience members through the co-op.
You bid on the audience at three fixed prices, currently $6, $12 and $20 per thousand. The more targeted and refined the audience is, the more you will pay. When the ad runs, the site where the ad was placed will get the (bid) price less 20% commission, which includes ad serving, analytics and customer service. We're committed to taking an active, consultative approach with the co-op, and we will offer training to sales teams.
Because we will have a number of sales partners, there will be a variety of ad campaigns running most of the time, each with different requirements. So when a Web visitor clicks on a co-op member's page at any given moment, the highest paying ad will fill the space. If a website works with a network—such as Google AdSense, and the available co-op ad pays less than the ad network average—the impression kicks to the ad network directly.
Digital Directions: What verticals are you serving?
Kowl: We're calling the first silo “industrial business technology” Next, we're looking at energy, green technology, defense and medical IT, and we'll see how the categories break out as we get more members.
Digital Directions: Are you only selling banner advertising?
Kowl: Banner ads are the first step; next is lead-gen. I believe white paper distribution will become big, and I see mobile down the road.
Digital Directions: What's the ad serving technology behind this?
Kowl: We're using adConductor, (a division of Burst Media), which is customizing the system for us. The co-op members will have access to their own publisher portals, which will give them very granular control. One important feature is that each publisher will be able to block advertisers, competitors or categories of readers so they don't cannibalize their own sales.