Reuben Katz presents his achievement-based network for developersRead more...
Venrock's Brian Ascher is our guest host, evaluating Glam Media
This Vator Box is brought to you by Liquid Scenarios.
Recently, Glam Media, an advertising network focused on female and male-oriented sites, launched Glam App Network. Essentially, it's a widget that any publisher can embed onto their site to enrich their site with content, and revenue. Glam Media is one of the most innovative and leading ad networks. Who better to be our guest host on Vator Box, than Brian Ascher, venture capitalist at Venrock, which invested in Adify, an ad network acquired for $300 million by Cox Enterprises. Ascher is on the board of Adify.
As always, Ezra Roizen joins me as our Vator Box regular.
In this segment, Ascher and Roizen pointed out the following:
- Glam is at the top of the list of ad networks
- Glam will be challenged in this economy, as will any ad-dependent company
- Glam's move into creating a network for men was smart
- Glam has a huge hurdle now that it's raised more than $120 million, at an estimated $500 million valuation
Ascher's advice: "Advertising is somewhat of a cyclical business. So, [the trick is] tempering growth and the business, with your ability to sell, sell, sell. And, defending your margins long term as a middleman, which every ad network is to some extent, is critically. He doesn’t talk of himself as an ad network, he calls himself a “content” network. He’s trying to provide more value to his publishers, other than just selling ads on their behalf. There’s a lot of content syndication that goes on and these are all ways to get deeper and deeper in with their publishing customers, and should allow them to take a meaningful cut of the advertising."
Roizen's advice: "[Think] How do I keep engagement across my networks? How do I drive traffic across networks. How do I begin to offer more integrated campaigns, because we’re going to move from awareness campaigns to how-do-I-deliver outcomes. Serving display ads won't be enough."
What's the outcome for Glam? I asked.
Both said that they don't see big media making such sizable acquisitions anytime soon. So, Glam is going to have to stay the course, get profitable and survive alone for now.
(Correction: We released a Liquid Scenarios Minute that said that iVillage was bought by CNet. Liquid Scenarios has corrected this analysis and provided us with a new one below)
Here's the Liquid Scenarios Minute:
Glam Media's business model is hyper efficient, generating more revenue per employee than Google in 2008, with substantially lower fixed costs. Glam's team is a who's who of new media investors and achievers. Moreover, theyshare a history of success as a team, with many of their sales and technical team having worked together at NetObjects and Viaphone. As a result, although the pre-money value of Glam would have represented a grand slam exit scenario for most ventures, Glam's team has collectively been involved in multiple billion dollar IPOs and acquisitions.
Assuming Glam realizes comparable operating results as a percentage of revenut, but on a more consistent basis, then growing revenues to $250 million to $300 million could translate into an IPO in the $1 billion to $2 billion range, a territory not unfamiliar to Glam's founders, management team or key venture investors. IVillage was acquire by NBC for around six to seven times revenue, or about $41 per unique, with the company trading at around 50 times that year's earnings. Assuming Glam realizes comparable operating results as a percentage of revenue, but on a more consistent basis, then growing revenues to $250 million to $300 million could translate into an IPO in the $1 billion to $2 billion range - a territory not unfamiliar to Glam's founders, management team or key investors
That's the Liquid Scenarios Minute
Read more from our "Vator Box" series
Rebeccan Lynn and David Hornik are guests host on Vator BoxRead more...
A look at an ad solutions to help publishers monetize outbound linksRead more...
Related Companies, Investors, and Entrepreneurs
Joined Vator on
The founders of Glam Media created a new media model to bring brand advertisers to vertical audiences online: vertical content networks. Today, Glam Media—with its Glam.com (women) and Brash.com (men) networks—is the fastest growing Top 10 media Web property in the U.S. with a total reach of 52.3 million unique monthly visitors in the U.S. and approximately 90 million uniques globally. Glam Media recently entered the comScore Top 10 Web properties list and is also a Top 10 Display Ad Publisher. With 700 sites total, Glam Media is composed of: Glam.com—a carefully curated network of popular and influential lifestyle women’s Web sites, blogs and magazines; and Brash.com—the newly launched all men’s network. Glam Media is backed by Hubert Burda Media, GLG Partners, Accel Partners, DAG Ventures, Draper Fisher Jurvetson, Walden Venture Capital and Information Capital. Glam Media is headquartered in New York City and Silicon Valley, California, with international offices in London, Munich, Berlin, and Tokyo.
Joined Vator on
Cox bought Adify for $300 million on April 28, 2008. http://www.vator.tv/news/show/reports-say-cox-buys-adify-for-300-million
It’s a fragmented Web out there. Fortunately,
networks powered by Adify deliver the voice, choice and control you’ve been
waiting for. Are you an advertiser targeting niche audiences? A publisher
seeking higher revenue for high-quality content? An entrepreneur looking to
transform market insights into profitable vertical ad networks? Adify’s unique
platform provides the simple, turnkey support needed to make it all possible.
Truth is, when it’s easy to build a vertical network, it’s easy to reach a
Washington Post, The Guardian, ComputerWorld. These are just a few of our recent success stories – partners who trusted Adify to extend brands, increase reach and grow revenues. After all, every single Adify Network is built by an experienced expert with a unique market insight. Like HotChalk, who used our Build Your Own Network platform to aggregate high-quality, brand-driven education content. The moral? With Adify, the power of online advertising is finally where it belongs. With you.