Drew Lipsher of Greycroft Partners says ad dollars will find an audience online

John Shinal · February 14, 2008 · Short URL: https://vator.tv/n/139

Andrew (Drew) Lipsher, a veteran media-industry executive and now a venture investor with Greycroft Partners, says ad money will follow online shows that can build an audience.

When we caught up with him at the OnMedia conference in NYC, he had just raised some eyebrows by stating something during a panel session that was not obvious to everyone in the audience at the Mandarin Oriental conference room:

The perceived economic value of online video and music content among a younger generation of consumers is "zero," Lipsher says.

Later, he told Vator.tv that "you can't build an industry on something that's free."

Not unless it is a subscription service supported by advertising, or show sponsorships, or some similar business model, Lipsher says.

Spending on U.S. advertising is a $275 billion annual business, according to Lipsher. Right now, less than 10% of that is online, and most of that is automated search advertising, which Lipsher calls "direct mail."

As more Internet content creators attract an audience, online ad spending will continue to outpace overall industry growth. Lipsher didn't say it but "Ask a Ninja" and "Rocketboom" come to mind -- not to mention WallStrip, which was acquired by CBS.

"Brand advertisers want to be involved with a hit," to get access to its audience, Lipsher said during the panel discussion the day we taped him.

And in a virtuous cycle, the more money spent, the higher the quality of online video will become, thus in turn attracting more ad dollars, according to Lipsher. 

His firm is taking written business plans from Web content startups.

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