Taking on ad network DoubleClick, Softbank Interactive Marketing today launches its long-promised network of branded content sites.
Initially, the Softbank Network will be made up of 27 sites, representing 43.5 million advertising impressions a month, according to Softbank CEO Caroline Vanderlip. Softbank purchased its ad targeting and distribution system from Australian software developer Worldwide Media.
Twenty-three of the sites represent new business for Softbank Interactive, New York, which already is responsible for repping the entire ad inventories of such sites as Netscape, ZDNet and Playboy. Individual representation of those "foundation" sites will continue to make up the bulk of Softbank's business, with the ad network providing a minority of the company's revenues, Ms. Vanderlip said.
Sites in the network, which include GolfWeb, HotMail, N2K's Music Boulevard and others, are grouped into seven content categories: college, finance/investing, games, sports, travel, technology, and arts/entertainment. Ad rates will be sold on a cost-per-thousand basis. The base CPM rate for the finance category will be $35, which Ms. Vanderlip said was similar to the other categories.
She said the network's greatest strength will be Softbanks's global sales force of 60 people.
Softbank will take a 40% cut of ad revenues for sites that sign up for the network. However, it will not be the exclusive ad rep for many of the network sites.
Rather, ad inventory being sold by multiple networks will be allocated to the rep firms on an exclusive basis.
For example, Softbank might sell ad space on GolfWeb's home page exclusively, but DoubleClick might sell ads on another portion of GolfWeb's site.
Kevin O'Connor, CEO of DoubleClick, said of Softbank Network's launch, "They're late. I'm glad to see they're doing it, as it further legitimizes the model, but they have a lot to learn."
COMPETING WITH DOUBLECLICK
DoubleClick launched a year and a half ago and currently has 60 member sites.
Bill Bass, an analyst with Forrester Research, said he believes there is plenty of room in the market for both networks, but he adds that DoubleClick will have to get used to its first real competitor.
"DoubleClick has never had any competitors at the high-end level before ... and like any business, it's a lot more fun being a monopoly.
"We [at Forrester] think that ad networks will continue to be important because it's very inefficient to buy advertising on the Internet right now. Traffic is so diffuse . . . the question then becomes, `Can these people get enough ad impressions to matter?' Softbank is probably in a better position than anybody else to do that because of the relationships they have through their repping."