The demise of New Century Network taught its former competitor Real Media a valuable lesson about selling online ad space: National advertisers don't want to buy too local.
"When they think local, they're thinking Boston, Philadelphia, Los Angeles and Washington," said Dave Morgan, president of Real Media, New York. "They're not thinking Cedar Rapids, Iowa, at least not yet."
Prior to New Century's folding, Real Media's proposition was to sell advertising to buyers interested in the top 100 markets in the U.S.
NOT BUYING CEDAR RAPIDS
Now, after listening to many of New Century's former partners, such as Knight-Ridder--which Real Media has since picked up as a client--it's focusing its efforts on the top 20 U.S. markets.
"Until they're buying San Francisco and Philadelphia, they're not going to buy Cedar Rapids," said Mr. Morgan, noting national advertisers still need to be educated about the power of local online media.
"If they want to reach the NFL sports affinity [audience], their first reaction is to buy a national property, such as ESPN SportsZone or [CBS] SportsLine," he said. "It's a reach for them to think about reaching New England or Dallas Cowboys fans by buying in the local online newspaper section," Mr. Morgan added.
NBC OR 35 NEWSPAPERS?
Real Media's network now includes 300 local Web sites, with recent additions including the Las Vegas Sun, Rocky Mountain News, Channel 4000.com and Newsnet5.com. National advertisers that have used the network to target locally include American Express Co., Ameritech, Sprint Corp., GTE Corp., Bank of America and the California State Automotive Association.
"Traditionally, newspapers have had a tremendous inability to appeal to national advertisers," said Bill Bass, analyst at Forrester Research. "Would you rather buy the NBC network or cut deals with 35 different newspapers?" he said, noting that Real Media will brizng value to national advertisers looking at making regional buys.
SUPER NETWORK TO LAUNCH
However, he added, "I don't think you'll get national advertisers to buy locally."
Beyond its U.S. efforts, Real Media is making a big push globally. In September, Real Media plans to launch the Real Media Super Network, a conglomerate of Web sites for the 50 largest publishers around the world.
Paris-based Le Monde, The South China Morning Post, Times of India and the Jerusalem Post are among a few of the big name international publishers slated for the new network.
In addition, The New York Times will likely be the flagship U.S. property in the Super Network, said Mr. Morgan. Pricing will be premium, around $50 per thousand impressions, he added, and there will be minimum site buys.
"The goal is to create a vehicle for global and transnational advertisers," said Mr. Morgan.
Real Media is in the final stages of selecting an agency for a U.S. trade campaign for the Super Network that will launch this fall with the theme, "We're local on a global scale."
"We really want to drive home the message that if it's local media, it's Real Media; if it's global media, it's Real Media," said Mr. Morgan.
"We think it's a pretty good play," added Peter Storck, VP-research at Jupiter Communications.
Contributing: Kim M. Bayne.
Copyright July 1998, Crain Communications Inc.