Condé Nast Portfolio, the upstart business magazine from the publishers of Vanity Fair and Wired, has a problem -- they have too much money. Portfolio's hardworking advertising team brought in more advertising money than the magazine has audience to show it to.
Usually, it's the other way around -- not enough advertising.
So Portfolio is addressing this issue by using spreading the wealth around. They'll do that by using a program offered by Adsdaq, which will put cookies on Portfolio visitors web browsers and find out what other sites in the Adsdaq exchange system Portfolio readers visit. Through the information the tracking cookie provides, Portfolio can offer those sites some of their overflowing advertising revenue, in exchange for the profits.
If Portfolio has enough traffic to fill their advertisers demand, they'd keep it all for themselves. Since they don't, they'll pick up remnant advertising from other sites and spread the money around. Advertisers reach the right people, other sites get more money for their remnant ads, and Portfolio takes a cut.
This is a whole new realm of advertising. Never before would a publication willingly send advertisers to possible competitors -- or shift into what is basically a third-party ad sales position -- that would only happen online. The system allows publishers to provide with advertisers with "targeted scale", which seems like an oxymoron, but when you're trying to sell high-end products to a lot of people, its what you need. Placing BMW ads on the front page of Yahoo might not make sense, but placing ads in front of $100k/year earning 20-somethings is exactly what they want.
Trading and exchange systems like this may provide yet another route for battered newspapers and magazines -- if they were to implement them -- and another income stream for online publishers as well.
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Comments
This is really smart - an even bigger idea is for Portfolio (and the battered newspapers and magazines you mention) to place ads on all of their content that is reused across the web. In other words, ads follow content as it is distributed across the Internet - a cut goes to the site on which the content is hosted, a cut goes to Portfolio and a smaller cut to the ad networks for making this happen.
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