Online advertising network 24/7 Media Inc. hopes to be serving its domestic ads entirely on its own by the end of June, a move that would free the company from dependence on competitor CMGI Inc.’s ad serving unit.
New York-based 24/7 also expects to handle all the ad serving for Asian, European and Canadian Web sites in its network by summer’s end, said James Green, the company’s president of technology solutions.
Most marketers know about ad networks: They’re large affiliated groups of Web sites where companies such as 24/7 Media, DoubleClick Inc. or Real Media Inc. run banners for advertisers. But ad networks require ad servers, the technological backbone that actually puts ads in place on sites in real time.
The 24/7 network still relies mostly on AdForce Inc., Cupertino, CA, as its ad server — a sticky situation because AdForce was bought this year by Internet mega-company CMGI, one of 24/7’s biggest rivals in the ad network space. In November, 24/7 “pre-announced” an ad server of its own called 24/7 Connect. The company then bought small ad server Sabela Media Inc.
24/7 previously had never divulged when Connect would be ready to handle its network’s billions of monthly ad impressions – a technologically staggering task that AdForce executives have openly said they don’t consider 24/7 capable of pulling off on its own.
“I just really question whether they understand the level of complexity and how operationally challenging that is,” said AdForce vice president of worldwide marketing Dee Cravens. He said 24/7 tried to cut itself loose from AdForce as early as April 1998, only to backpedal.
Still, 24/7 predicts a successful parting of ways.
“We’re pretty confident that there will be no problems,” Green said. “But you need to still roll it out in a managed way.”
Why? Because if Connect slips up after AdForce is “turned off,” then 24/7 doesn’t deliver for marketing clients that bought online ads and Web publishers who depend on those ads for revenue.
But so far, so good. 24/7 began moving sites to Connect in the last week of February. By the end of March the company had successfully shifted over 15 percent of the network’s ad impressions without any major problems, Green said.
24/7 has tested Connect at 1 billion impressions a day, considerably more than the full network’s normal volume. The 24/7 network currently runs between 5 billion and 6 billion impressions per month.
Web publishers in the 24/7 network already have received copies of the computer code they’ll need to install when their changeover takes place, Green said. But he emphasized that 24/7 is tightly managing the shift.
The company plans to sell the ad serving capability it acquired through Sabela to sites outside the 24/7 network, but the technology should be integrated with Connect by year end, Green said.
Novices to the online advertising space might find such behind-the-scenes maneuvering among the companies that serve banners rather arcane. But ad serving is big business – and getting bigger.
No. 1 player DoubleClick, New York, raked in revenue of $30 million through its TechSolutions ad serving unit in the fourth quarter, and sales are growing at 30 percent to 40 percent per quarter, said David Rosenblatt, the company’s senior vice president of global technology solutions.
Rosenblatt said DoubleClick will soon be making more money from its ad serving business than from its ad network, which is the world’s largest. TechSolutions accounted for $68 million of DoubleClick’s total 1999 revenue of $258 million. That total includes contributions from the company’s Abacus data unit.
“This business is large and it’s growing really fast,” Rosenblatt said.
AdForce’s Cravens said the loss of 24/7’s business would not “materially affect” AdForce’s bottom line. AdForce serves 20 billion ads monthly.