24/7 Media Forms European Online Advertising Network
24/7 will own a 60 percent stake in InterAd and provide investment capital for the entity, which will be renamed 24/7 Media Europe. The deal, worth approximately $4 million, enables 24/7 to leverage and grow InterAd's current network of 64 sites that receive 238 million hits per month. InterAd claims to be Europe's first and only international online advertising firm.
24/7 also maintains an Asian presence through its 24/7 subsidiary in Hong Kong, and the company foresees numerous cross-selling opportunities across the three continents. It will maintain eight sales offices in seven European countries.
Andy Johns, CFO for 24/7 Europe, said Europe is 12 to 24 months behind the US in its development of Interne-based sales and advertising, but he sees the region eventually becoming as attractive as the US market.
"We think it's a terrific time to set our stake in the ground," Johns said.
Europe's online advertising revenue is expected to grow from $105 million in 1998 to $2.8 billion by 2003, according to Forrester Research, Cambridge, MA. By comparison, Forrester estimates advertising revenue in the US was $3 billion in 1998 and should grow to $8 billion by 2002.
The new partnership will focus on attracting Europe-based Web sites and those that target Europe as a whole.
One of the company's initial steps is to identify which sites are in demand in which countries and whether the content, the language, or both must be altered to be effective. Johns said preparing ads for multiple languages is mainly a procedural issue and that 24/7 Europe will work with clients and agencies to set up different versions of ads.
24/7 Europe will also sell advertising to European clients that will appear on U.S.-based Web sites viewed by European consumers. Johns said tracking systems that determine the origin of users are used to place ads by geographic interest. A consumer viewing a Web site from Europe would see different ads than a consumer in the US.
Banner ads, buttons, multiple placements and sponsorships will be sold and content channels of sites with common interests will be developed similar to its 24/7 Network of 125 well-known sites and its ContentZone of 2,500 small to medium U.S. sites. Pricing will be based on the affinity of the sites where ads are placed. The closer a site is to an advertiser's target audience, the higher the rate.