Flossie Media Group forced out of online display ad market
Flossie Media Group, owner of Flossie.com which aggregates content from female-skewed online publishers, has been forced to bow out of the online display ad market in the face of competition from bigger publishers and ad networks.
Jenene Freer, Flossie Media Group founder, said it would instead focus on connecting advertisers with the sites in its network through “one-on-one communication” opportunities such as branded content, integration into social media, content syndication, newsletters and competitions.
She said the business was forced to make the “tough” decision to no longer sell display advertising in a marketplace that has changed dramatically in the past year and a half, including the launch of other vertical female-skewed sites.
“We’re not saying display advertising doesn’t work, we’re just saying it doesn’t work for us. Another network may be able to deliver a better result than us. When you don’t own your own eyeballs it’s difficult to compete with them. Cost per click is still the general currency, even though we think there are better ways of measurement,” she said.
It follows the release of Nielsen figures that revealed while online ad inventory is increasing, online display ad revenue fell in the three months to September this year.
Stuart Pike, Nielsen’s online division Asia Pacific research director, said this is a result of heavy discounting by publishers and ad networks and the over-reliance on cost-per-click ad sales.
Meanwhile, as part of the changes at Flossie Media Group, the 49 Australian and New Zealand online publishers Flossie.com it works with will be whittled down to half in the coming weeks. Freer said it has made the decision to focus on “a quality rather than quantity basis”.
“We need to reduce the number of publishers so that we can focus on being able to provide exceptional service to them and advertisers.
“Agencies would demand that we have one million eyeballs, but then they would just end up buying 10 per cent of it,” she said.
The changes will come into effect in January next year. Flossie.com launched in New Zealand in September 2008, and in Australia in July this year.
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Wow – that was quick. The model was pretty good, and I heard from a couple of agencies that they were quite impressive, but I don’t think they understand how much more competitive this market is than NZed in terms of yield and performance
watch this space I guess….
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“Forced to bow out” is a little strong I feel. No doubt financial pressures have led to the decision but there’s no argument that direct communications are more effective at driving response for advertisers than display ads. Whatever the underlying reasons I think this type of strategy should be supported rather than heralded as some sort of failure.
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Wow the Flossie model is a great idea and the USA uses it to great success but I guess we have too many big players controlling the market here in Aus
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After working for a burgeoning network and discovering how difficult it is to sell on eyeballs you don’t own, I think this model is going to be a great success. It’s definitely a way to be a part of the game while we wait for the aus market to mature and stop relying so much on the portals.
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Stop and think. When you dont’ have editorial control over your network’s content, then you stoop to quantity over quality. It was always an immature model
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Meringue, how on earth does the editorial content have anything to do with the ability to monetise it with display? Sounds like you don’t understand the model.
The issue is three fold:
– we don’t own our own eyeballs so doing long term / large inventory deals is difficult without having to renegotiate with all the publishers everytime. Too much hassle
– the constant pants dropping of CPM’s has meant that actually making any money out of display is difficult. Why do you think there’s the debate the charge for online news content? Creating content to sell display around is daft.
– we can make 5 times as much revenue in the EDM area and the automated system enables us to do this while managing both publishers expectations and workloads. Why wouldn’t we do it.
The term in the headline (whilst I’m sure it grabbed attention) of ‘forced’ out is a little far fetched. We have opted out. Happy for others to do it better than we can.
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We’ve always had the view at Allure that ownership of your content and audience is absolutely essential to building a long term valuable business. Valuable for clients in that you can offer integration with your audience beyond a standard banner, and valuable to the audience in that you control and manage the quality and quantity of content.
I just wonder whether the comment that display CPM’s are dropping is a fair comment? Sure, there’s always going to be rate/yield pressures – but the extent to which this is managed, and communicating the benefits of an engaged and quality audience is key to ensure ongoing sustainability.
Having read yesterday’s story on performance advertising driving rates down – this is something close to our heart at Allure and something we agree with – we actually think that the performance network model in the market is doing far more harm than good, but also opens up opportunities for targeted publishing environments that understand and sell off their position.
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Hi Ben, I 100% agree with you that offering tailored and integrated campaigns is the way to go and that’s what we’re focusing our efforts on. Creating content that you can sell in other ways outside of display is smart….
As I’ve said all day today, ‘this is just our experience’ – it’s not to say that it’s everyones or that display doesn’t work. Just isn’t our bag – not enough money in it to make the effort worth while.
Really impressed with what you guys are doing here, it’s looking good.
J
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Hi Ben,
Correct me if I’m wrong, but I thought a lot of your brands and international content are only under licence fromt he US?. I guess that’s a relationship that could end at some point, and surely you won’t then own the content?
Cheers,
Tim – Mumbrella
Hey Tim,
Yes, under licence from publishers in the US (Gawker Media, Sugar Publishing and Nerve Media), however on long term models – 10 years +. We employ our own editors on each title we publish that are responsible for creating unique Australian content that we own. Sure, we licence content from the US – but choose to publish what is relevant for the Australian versions of each site with relevant localisation when needed eg pricing, availability, seasonality.
Ben
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Good grief! Other media must be front row centre with popcorn watching this show play out? Can we not, as a category, find ways to share ideas and support those who plough new groud. There’s gold in them thar hills (online) and until we stand together, we’re going to look like a bunch of spoilt brats in a playground. Online is the most adaptable medium and I applaud anyone who tries something new. Leave the commodity driven models to fight over display. Find other ways to define your audience and offering and smart marketers will seek you out.
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it’s unfortunate as i thought this was a really solid concept and a way that could connect advertisers with quality context and content. Plus a sales network that could offer insight into this audience was a real source of value too.
Nailing women 25-39 has proven difficult for digital locally, magazines generally tend to get the lions share of investment for those looking at this audience outside of TV. In the US things seem to be different but that is probably due to the size of the overall ad pool and the ability to feed more mouths than anything deeper.
Can I be the first person to use some bad innuendo involving Ben’s comments about nailing women 25-39?
No? Probably best not.
Cheers,
Tim – Mumbrella
Good luck with the new model Jenene and congrats for making the brave decision to make such a major change to your company.
You should be proud that you generated some revenue for local niche publishers who had little chance of doing it alone (and will continue to do so). Much better than it going to the top 5 or the networks who send 75% of ad dollars back to the US head office in the form of comm’s or license fee’s.
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I never heard of this business. I guess it doesn’t really matter now.
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Can i share this story with you. An interesting discussion had recently with an old media friend who retired early to practice his short game. He asked me “why do they call them eyeballs?”
TV call them “viewers”
Radio call them “Listeners”
Newspapers and magazines call them “readers”
Yes ok…so he’s an old dog who only wants to learn new tricks that improve his handicap but it resonated with me and I have since removed the word from my vocab. It’s a small step towards putting a face to those eyeballs. My new word is “People”
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To continue the gold analogy, a fossicker never gets the same spot price for their gold as the big companies like Lihir and Newcrest – and we all know who ends up with the serious moolah!
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