Glam, fast-growing woman’s network, makes ad change

Glam, the controversial fast-growing woman’s online content and advertising network that just raised $85 million, is making some significant changes in the way it runs its advertising, VentureBeat has learned.

The changes are three-fold, and are significant because Glam has garnered widespread attention — some positive, some negative — lately in the industry for its efforts to apply new ad technologies and strategies to build its network of sites.

The latest changes include small changes in the way it delivers cheap, back-fill ads, but also more significant changes that offer publishers more control and which haven’t been disclosed until now.

First, perhaps most significantly, Glam is moving to open its ad platforms for publishers to exploit directly, letting them select the various premium ads that are available to them, or text ads available from Google, video and other ads. This also includes letting publishers run their own ad server. This is a step beyond what other networks such as Federated Media offer publishers. (VentureBeat uses Federated Media for its ad partner, for example, and Federated Media controls access to our ad server). The program, called “Glam Evolution for Publishers,” will provide software called “yield management,” which gives publishers more insight into how to maximize ad revenue.

Second, Glam is about to offer the ability to target ad inventory even more finely. Internally, it calls this “hyper-targeting,” and it allows advertisers the ability to place premium ads during certain times, such as primetime (by watching when traffic to a site hits a peak, for example). This is added to the ability to target prime placement areas on a site, which Glam determines by watching where on a Web site users tend to click through more often than in other places, for example. It ads this to its existing targeting of gender, age, geography and other demographic information.

Finally, in a change first reported yesterday by TechCrunch, Glam has made some changes in some of the “back-fill” ads it runs on publisher sites. Back-fill ads are used when no premium ad is taken out by an advertiser. Until now, Glam has run what it calls Glam brand house ads in these spots, for example ads announcing Glam Network’s upcoming blogger awards. Glam pays its publishers a small amount to run these ads, low rates (we’re hearing typically $2 CPM or less, though Glam won’t comment on specifics, citing confidentiality agreements with publishers) so they can be considered similar to Google Adsense which many publishers use for remnant advertising. Now, Glam is no longer running those house ads in many cases. It says it made the move to give its publishers more options, such as letting the publishers run their own brand ads, or open up the space to ads from other third-party servers. However, TechCrunch thinks differently. TechCrunch claimed the move is part of an effort to slash revenue it gives to publishers — suggesting Glam is doing this because it is losing money. It also accused Glam of a bait and switch, promising publishers guaranteed revenues per month initially (which the house ads were partially used to pay) in order to sign up publishers. Now, after impressing investors and raising a big round of capital, Glam will cut back on those payments, TechCrunch claims.

However, Glam tells me TechCrunch got it wrong. Scott Swanson,VP & GM Glam Publisher Network, said Glam will hold to the deals it has cut with publishers, including the minimum amount of revenues per month. Glam will continue to run house in cases where it needs to meet minimum revenue guarantees, Swanson said. (We asked Swanson several questions by email today about this house ad change, and we’ve run his answers below).

Finally, TechCrunch’s Michael Arrington suggests in comments the Glam banking relationship with Allen & Co had fallen apart. However, Glam’s Samir Arora told me this isn’t true. Allen & Co. and Banc of America Securities were the lead bankers in the last round, and the two banks continue to advise the company for M&A and business development deals, he said.

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Here’s the Q&A with Glam’s Swanson

VentureBeat: According to TechCrunch, you reportedly guaranteed a payment between $3 to $5 CPM for the house ads. Is that correct? And by taking that away, doesn’t that effectively take away real revenue from your publishers?

Swanson: This was reported incorrectly. [Editor’s note: Swanson wouldn’t comment on the CPM rate for house ads because, saying it is under contract confidentiality.] Glam is making no changes in paid for house ads to ensure our publishers will make the minimum levels of revenue they expect when they sign their agreements with Glam. The spirit of Glam’s unique contracts is one of trust — Glam sells premium ad inventory for its publishers and shares revenue with them — if there is a real revenue level that the publisher is guaranteed, Glam ensures that level is met by using house ads, and it will continue to do so.

VentureBeat: So before the change just reported, you’d run paid for house ads even above the minimum guaranteed in your contracts?

Swanson: In some cases, Glam has run house ads above the minimum levels to help manage ad inventory and quality of primetime ad spaces — though was not required to. Glam holds a strict definition of premium ad inventory with its publishers — audience (women, US, age, demo), behavior, primetime placement (above the fold, near post), context (channel, article) and engagement. This is the way Glam ensures brand advertisers can hyper-target audience across a wide network of publishers.

When Glam launched in 2005, we realized that most sites and blogs were mixing all ad inventory together and selling through any partner they could find- mainly Google AdSense and other low level ad networks. Unlike print or TV where premium ads are clearly defined and separate — inside cover, back cover vs. deep in the magazine or primetime and event based vs middle of the night for broadcast — on the Internet it is typical to see high end ads, followed by low level brands- sometimes on the same page at the same time. Glam found that brand proximity, audience targeting and primetime placement were critical deterrents for advertisers to move large brand $’s to the web. Glam started house ads to ensure premium ads were defined in display. This makes Glam unique — defining premium while paying publishers for it. Glam will continue to sell and serve premium ads and Glam house ads to publishers — is adding new options not unlike local stations in TV — they can sell used car ads or late at night non primetime ads.

VentureBeat: For most publishers, you reportedly sold only about 30 percent of your allotted inventory to advertisers, meaning your house ads accounted for 70 percent of inventory fill. Taking that away, publishers reportedly are losing anywhere between 30 and 80 percent of their revenue (depending on the CPMs of the house ads) according to TechCrunch. Is that right?

Swanson: [Editor’s note: Swanson wouldn’t answer this, again citing confidentiality agreements. However, I’m hearing that the 30 to 80 percent drop reported by Techcrunch is too high, because the house ads weren’t paying anywhere near the $3 to $5 CPM TechCrunch’s single undisclosed source claimed. In a conversation I just had with Arrington, he conceded the $3 to $5 numbers may be high. ]

VentureBeat: If you’d really meant more choice, presumably that would have meant allowing publishers to keep running the house ads, right?

Swanson: Glam is in the business of selling advertising to premium brands and creating a marketplace for publishers and owned & operated sites to generate revenue for Glam and its publishers. Several publishers on the network had been asking for these options once they made the revenue levels from Glam — this is a part of the roll our of more publisher services by Glam. Currently Glam is in the premium ads business and does not offer remnant display ads — offering brand ads is not a solution to this — allowing publishers to variably manage their non premium ads is. Stay tuned for other ad services and choices on the Glam Insider Publisher platform.

VentureBeat: The rumor, again according to TechCrunch, is that you’re looking to acquire blogs you sell ads for, and may be cutting revenue you give them, so that they are squeezed, and are forced to sell – and this lets you acquire them cheaply. Is that correct?

Swanson: This is not correct. As a web site and blogging business yourself, you would understand that success online comes from tremendous continuous energy to create and build an audience online. Any short term changes simply would not work, as there would be little long term success after the deal closed. Glam is a transparent, trust-based company that has built a solid reputation with its publishers — that is earned through consistent actions over time. For Glam, publishers are the heart and soul of everything we do, and they expect Glam to run a company responsibly, yet provide them with options and choices. The business model of Glam helps bring power to unique and independent voices and will continue to provide the best services to them.

VentureBeat: Why would a publisher choose Glam with these changes? How is Glam different from other options?

Swanson: Glam, with over 29 million monthly visitors as reported by comScore MediaMetrix, uniquely provides the largest reach for Women 18-49 to premium brand advertisers. Glam is the number one choice of publishers targeting women in lifestyle categories because Glam brings the best brand advertisers to the most unique content in this vertical. The combination of wide reach with focused niche sites provides a compelling solution for publishers. Glam offers significant revenue net to the publishers, the best brand advertisers, custom advertorials, sponsorships and site specific sales. In addition, Glam has built a suite of content, technology, ad serving and other services that help the publishers save time and money. Like Google AdSense for text ads, Glam believes providing the best monetization to publishers, while building the best returns for advertisers in display ads will create the best display ads marketplace in the long term.

Disclosure: VentureBeat’s business manager is related to a Glam co-founder.