Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Adify: Everything Is Hunky Dory In Online Advertising

Posted by Tom Foremski - May 21, 2009

Russ Fradin

Russ Fradin says the online advertising industry is doing well and growing -- it's certainly not a shrinking medium even though some reports of falling ad rates might indicate problems.

Mr Fradin is CEO of Adify, a large advertising network that was acquired by Cox Enterprises about a year ago. Its a platform for building smaller ad networks focused on "vertical" content such as iVillage - which caters to women. Here are some notes from our conversation:

-- I mentioned Nick Denton of Gawker saying that the micropublishing dream is dead. Mr Fradin disagreed, saying that "it was never going to happen." The idea that bloggers running niche sites would be getting rich was a fantasy. He thinks that micropublishing will gradually become more profitable but no one is going to be selling their blogs and retiring.

-- Every online ad network continues to do well despite the economy because there are still a lot of ad budgets shifting online from radio, television and newspapers.

-- There wasn't much of interest at the recent AdTech conference in San Francisco except that advertising agencies are wondering what role they will play in the online world.

-- There is a tremendous amount of content online and more coming online all the time, this appears to dilute online advertising dollars. This fragmentation is increasing and that's what makes it difficult for media companies to make money because there is so much competition. Fragmentation is destroying media. Ad networks provide value because they aggregate content for advertisers.

-- Won't there be a shakeout on the content side I asked? No, there will always be people willing to create the content for little money because they have a day job.

-- Politico is a good example of a media company that is doing well. It is syndicating its content along with its own advertising network and sharing the revenues with newspapers. Newspapers are able to shut their Washington bureaus and use Politico content instead.

-- Social networks won't find a magic formula to boost their CPM rates but they can still be very lucrative because they can serve up trillions of pages.

-- Adify is nearing signing up 200 vertical ad networks.

-- Federated Media seems to be turning into a social media ad agency.

-- Cox has been a great owner, very nice people. It lets Adify do its job. Adify is growing and hiring lots of engineer in UI and back-end operations.

-- Every online ad network continues to do well despite the economy because there are still a lot of ad budgets shifting online from radio, television and newspapers.

-- There wasn't much of interest at the recent AdTech conference in San Francisco except that advertising agencies are wondering what role they will play in the online world.

-- There is a tremendous amount of content online and more coming online all the time, this appears to dilute online advertising dollars. This fragmentation is increasing and that's what makes it difficult for media companies to make money because there is so much competition. Fragmentation is destroying media. Ad networks provide value because they aggregate content for advertisers.

-- Won't there be a shakeout on the content side I asked? No, there will always be people willing to create the content for little money because they have a day job.

-- Politico is a good example of a media company that is doing well. It is syndicating its content along with its own advertising network and sharing the revenues with newspapers. Newspapers are able to shut their Washington bureaus and use Politico content instead.

-- Social networks won't find a magic formula to boost their CPM rates but they can still be very lucrative because they can serve up trillions of pages.

-- Adify is nearing signing up 200 vertical ad networks.

-- Federated Media seems to be turning into a social media ad agency.

-- Cox has been a great owner, very nice people. It lets Adify do its job. Adify is growing and hiring lots of engineer in UI and back-end operations.

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