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Three years ago, Elizabeth Blair and Andy Atherton were executives at Yahoo, working to move billions of dollars’ worth of online advertising inventory, when they noticed a mismatch between how digital businesses were selling and how major brands go about buying.

Web portals and online media companies were swimming in excess ad space, with buyers exploiting the spot market to get last-minute deals. Meanwhile, back in the world of old media, things were different. Every spring, the TV networks held the “upfronts,” part of a glitzy in-person marketplace where envoys from car makers, banks, and beverage giants could see glimpses of the upcoming fall shows and reserve tens of billions of dollars’ worth of airtime in one fell swoop. For sure, it was an old model, but every year, it worked.

“These [big brand] companies are used to spending a big block of money a few months in advance of a campaign and then only knowing if it worked a few months after it is done,” says Atherton. The key to selling TV advertising well in advance is that there’s only a limited supply of ad space. “The conventional online advertising market can’t offer that,” he adds.

Still, Blair and Atherton wondered whether they could create something similar for the digital world. By January 2008, the pair had quit Yahoo, secured $3 million in venture capital, and opened the doors of Brand.net. Blair, the CEO, said they were responding to a do-or-die situation. If digital publishers can’t make their business model work, she told Advertising Age, “they’re not going to be able to stay in business, and that’s bad for the Internet.”

Brand.net’s product, the Media Futures Platform, makes it possible for firms to buy online advertising months or even a year ahead of time. The company offers spots only on high-traffic, high-quality sites, and it guarantees how many people, and what demographic, will see those ads. The idea was compelling enough to attract advertising giants such as Unilever and Wal-Mart–plus an additional $24 million of funding.

Brand.net relies on in-house technology that crunches data on the pricing, availability, and performance of online ad slots to predict where prices for various types of ads will be on future dates. Once a price quote has been generated and a customer has accepted it, Brand.net reps contact the website publishers holding the ad inventory and buy it up on behalf of the client. After that, more algorithms track the performance of the ads from different customers and juggle Brand.net’s inventory to ensure that the advertiser gets the promised audience.

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Credit: Brand.net

Tagged: Business, Business Impact, digital marketing

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