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Can Ad Networks and Premier Inventory Co-exist?


Jon Miller and Ted Leonsis love the Ferber brothers!

AOL Advertising (formerly Platform-A) is watching the pendulum swing to a sales model that segments owned and operated inventory sales from the network.  After a very brief experiment selling them together, they will now be sold separately again.

Before I address the question of whether it is possible to sell both of these things together, let me give my quick perspective on some of the organizational history of AOL Advertising.  None of this is particularly interesting and I assure you that none of it is revisionist, but this is the opinion I had for more than 2 years as we tore through leader after helpless leader.

Randy and Ron were looking for someone to combine the sales forces of Platform-A. was growing like gangbusters and AOL ad inventory sales were flagging.  AOL sales had all of these senior, senior guys that knew every player in the market, had great experience and relationships, and was missing numbers left and right.  Randy and Ron’s theory,  I tend to imagine, was that the difference must be that the network product was simply better.  People were buying it despite a more junior, less-experienced sales force.  If we had our best people selling our best products, think of the amazing things we could do!

I was not that close to sales or Lynda, so I don’t know for sure, and I never had one conversation with Randy and Ron, so I really, really don’t know, but I figured that when Mike Kelly was getting pressure from Randy and Ron to combine them, was fighting to not combine because there was really nothing in it for them: combination probably would have meant that it would be harder to hit their numbers, their more junior people would be the odd people out in an account re-alignment, etc..  Furthermore, was the golden goose, no one wanted to mess with it, and Mike Kelly, a long, long, long-time media sales guy and a good guy all-around (although I never had one conversation with him, he seemed nice enough and smart), knew, as I did, that sales force re-orgs always mean 2 quarters of missed numbers no matter what.

Mike fails to act and Curt gets the job.  Curt doesn’t do it, so Lynda gets the job.  At this point, Randy and Ron were probably hoping that if Lynda was suddenly responsible for the whole number, suddenly she would be a lot more open-minded about salesforce integration.

Yea, and verily it came to pass, there was one sales force selling products virtually instantly.

Yea, and verily it came to pass, quarters were missed.

Yea, and verily it came to pass, management whipped and sawed and everyone was replaced yet again.

I guess this article implies that I don’t value sales reorganizations.  Let us be clear, I do value them, but only if you really know that you are moving to a much better structure.  It better be a lot better to justify the two quarters you instantly miss on the one.  Furthermore, you rarely, rarely really know if it is that much better, so it is typically hard for me to justify.

Hopefully this also makes it clear that, in my opinion, there was probably not much anyone could have done to yield a better outcome in this situation.  In the abstract, everyone did the best they could with what they had.  Certain players could have tried to do things different, but the end result probably would have been much the same.

Anyway, back to the original question: Can a company even sell premium inventory it owns and operates and run an ad network?

It is hard.  Part of being an awesome ad network sales force is to tell people that they overpay every time they buy inventory directly.  Talk about how much more efficient ad network purchasing practices are.  The power of reach, optimization, and tight frequency caps.

All of these are anathema to selling your own inventory.  And the closer the two sales forces are, the harder it is to really go after each other – and that is exactly what a sales guy has to do to be successful: Killer instinct every day.  Ad network guys have to bash home page buys.  People selling a home page have to deprecate networks.  It is their nature.

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