Demand Media Will Sell Web Ads for Village Voice, Awl After $14M IndieClick Buy
The once much-derided content company Demand Media will soon start selling advertising for Village Voice Media and the mini blog syndicate the Awl as part of its $14 million acquisition of ad startup IndieClick Media, described today as Demand reported quarterly earnings.
The company reported gains in net revenue for the most recent quarter, up 34% to $76.6 million, which excluded money it pays its partners, also known as "traffic acquisition costs." Net earnings grew 50% to 6 cents a share, beating analysts' consensus estimate of 5 cents per share.
The content company also inked an ad sales arrangement with Google that allows the search titan to sell a portion of Demand's web pages at higher ad rates then a traditional ad network would command. Google has been trying to bring in higher ad rates, partly by setting aside some display inventory and demanding higher rates for it. That was the idea behind Google's planned $390 million acquisition of AdMeld, a startup that helps publishers sell advertising at higher rates through competitive bidding exchanges.
"Google wants more access to premium inventory, and we want access to their technology," Chief Revenue Officer Joanne Bradford said. "It's a win for Google to have access to our inventory and it's a win for us to have access to their technology and scale."
Demand said its acquisition of the Los Angeles-based IndieClick will allow it to reach what it sees as a critical and growing segment of the web audience: 18- to 34-year-olds. The small 35-person sales shop represents websites that appeal to indie mindsets such as Village Voice Media's newspaper sites and the Awl's growing group of blogs. It also represents Playlist, Trailer Addict, Texts From Last Night and Current TV's website, most of which allow IndieClick to sell ads as an exclusive third party.
"With IndieClick we're going to be a force in the 18-to-34 culturally relevant website group," Ms. Bradford said.
IndieClick also gives Demand a slate of custom ad units that bring in as much as $20 for every 1,000 page views as well as advertisers such as Mazda, Schick, Coachella Music and Arts Festival and various movie studios. IndieClick represents publishers that altogether have an audience of over 27 million monthly readers.
"We think a modern-day publisher needs to think along these lines of being more culturally relevant," Ms. Bradford said.