Nicholas Carlson | Sep. 21, 2011
Patch, AOL’s very expensive bet on local news blogs, lost its director of sales today – a month after AOL’s SVP of local ad sales also bolted.
Scott Colontonio quit today for a job at Google’s New York office, where he’ll be joining commerce field sales team, a source familiar with the situation tells us.
Colontonio announced his departure during a conference call today, another source says.
Colontonio’s departure comes a month after AOL SVP of local sales Mike DeLuca left the company.
AOL still depends on its declining Internet access for almost all of its profits, and Patch is one of its biggest bets. It is said to be investing $160 million in the division just this year. Patch has more than 840 editors and a few hundred sales people around the country. It isn’t close to profitable. (More on this tomorrow.)
In June, we talked to a self-described “disgruntled” Patch ad sales person, who told us the project has been a “disaster.”
He blamed two things. The product – “they’re selling a branding advertising campaign to small businesses that should never put their first dollar in that bucket – and Patch sales leadership.
“It’s leadership, or lack thereof. They have the wrong people in leadership capacities, partly because they were so hasty in building the model and trying to be first to market that they forgot that quality people are essential to getting anything off the ground.”
Briefed on the details of this story, a Patch PR person stalled for hours.
The online business of serving up daily deals has attracted millions of dollars in venture capital and spurred dozens of clones of market leaders Groupon Inc. and LivingSocial Inc. Now the industry is starting to shake out.
Nearly one-third of all daily-deal sites nationwide—or 170 of 530—have shut down or been sold so far this year, according to daily-deal-site aggregator Yipit.com, including sites with names such as Scoop St. and RelishNYC. Even big operations such as Facebook Inc. and Yelp Inc. that could capitalize on their large audiences to build a daily-deals business have recently pulled back on the service.
The daily-deals business has turned into an “arms race,” with competitors spending money to attract subscribers and hundreds of employees and making it more difficult for other sites to keep up, said David Ambrose, the 26-year-old co-founder of Salesscoop LLC’s Scoop St., which was sold last month to rival BuyWithMe Inc. for an undisclosed sum.
At the heart of the winnowing is the shifting economics of the daily-deals business. Setting up a daily-deals site—in which the site takes a cut of the online coupons it offers consumers—requires just a website, some emails and local merchants willing to offer a discount. But as the industry has started maturing, the costs of running such a business have soared.
In particular, the cost of acquiring subscribers who redeem a daily deal has skyrocketed during the past two years, said executives at daily-deal websites. While snagging early adopters who were curious about daily deals initially required little marketing, it now takes more spending to get to remaining consumers and to cut through the noise created by so many competitors.
SEPTEMBER 13, 2011
Channel, location, size and placement all matter for telecom display ads
The telecom industry is one of the biggest spenders on online advertising. Between 2010 and 2011, telecom ad spending climbed by 7% to $3.62 billion and eMarketer estimates the industry will spend close to $4.6 billion on online ads by 2015. New research suggests the industry has unlocked some key findings in order to achieve high user engagement with its display ads.
Perhaps due to the substantial resources telecom marketers are devoting to online advertising, the industry is enjoying higher-than-average user engagement with its ads. Research from ad solution provider MediaMind (formerly Eyeblaster) suggests that ad placement, banner sizes and the time in which users view ads have an impact on engagement metrics.
According to MediaMind, for every 1 million impressions, web users “dwell” on 70,000 telecom ads and click on 1,800. MediaMind defines dwell rate as impressions that are intentionally engaged with by touch, interaction or click, and by this metric the telecom vertical outpaces nearly all other categories thanks to a dwell rate of 7.5%. Telecom is tied for second-highest vertical in terms of engagement, and trails only the sports category.
By BtoB Media Business
Arlington, Va.—Overall newspaper ad revenue fell for the 20th straight quarter in the second quarter of this year, according to data compiled by the Newspaper Association of America. Aggregate newspaper ad revenue has not posted an increase since the second quarter of 2006.
Overall ad revenue declined 6.9% to $6.0 billion in the second quarter compared with the year-earlier period. Print revenue fell 8.9% to $5.2 billion in the same time frame. A bright spot was provided by online ad revenue, which increased 8% to $803.4 million in the second quarter.