The good news is that Federated Media is making this decision not because it’s given up on its blogger publishers, but because the company believes in helping the bloggers, and the truth is this: traditional banner advertising is beginning to fade away.
Instead, Federated Media is beginning to instead focus its energies in a different way – by sponsoring content or what Federated Media is calling “programmatic media.”
The Next Web breaks it down pretty well, and quotes the founder of Federated Media as well:
As FM’s founder and executive chairman John Battelle pointed out in a recent blog post, “If we don’t figure out better models for how to get the ‘content creator’ paid, we risk losing the oxygen that feeds the web ecosystem.” Until recently the idea has been that some sort of in-kind traffic driver would help sites to get more money for their display ads, but the entire system is breaking down, becoming overtaken by Programmatic Media.
Now, what’s interesting is that last year Federated Media aquired Lijit – a more traditional banner ad service – and will refer out all banner ads to Lijit instead. So I’m not sure it’s fair to say they’ve abandoned traditional ads entirely.
To be clear, Federated isn’t entirely stepping away from direct sales. Its conversational marketing and native ad products are sold directly, but Federated could conceivably set up a programmatic platform for its native ads that would essentially standardize the units. Facebook, Twitter, Waze, Google and Sharethrough are only a handful of examples of companies that have erected self-serve platforms for native ads, and during Yahoo’s most recent earnings call, CEO Marissa Mayer acknowledged the portal plans to invest more in programmatic buying.
Asked about the possibility of converting Federated’s native ads to a programmatic-buying model, Brown said to “stay tuned” as part of the company’s road map is to bring the native units to a larger scale. Of course, many in the industry have questioned whethernative ads, which often require detailed, custom development for brands and publishers, can be scaled.
This is a truly interesting development. Also, please note: this does not impact or change the partnership with Clever Girls and Federated Media ads, at least not right now.
What do you think? Is the game really changing?