[Posted on December 11, 2007 - 5:41 PM]
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DiggOnline advertising 1.0 was judged a failure in the late 1990s when marketers discovered that few consumers were moved to immediately purchase goods when the means to do so was just a click away from the ad. But it always seemed a little suspect that the conclusion drawn from that was that Internet ads were ineffective, not that it demonstrated for the first time that advertising itself is ineffective.
But now that online ads are soaring in popularity and investors are clamoring for ways to play in the space, it's no surprise that players in traditional advertising sectors are looking for ways to adapt online models to new sectors. That has played to the strength of longtime television ad broker REVShare in a big way, with the company's patient approach to cost-per-action billing paying big dividends in a $20 million growth equity round from Carlyle Group and HIG Ventures. REVShare will use the money to expand a proprietary bidding system that allows advertisers to purchase TV time on a cost-per-action basis similar to Web advertising exchanges.
The deal is the first outside investment in the 18-year-old company's history and comes at a time when venture investors and existing media companies are scrambling to get a bigger piece of Internet ad dollars. But as new interactive TV technology looms on the horizon, REVShare's experience in the industry and ballooning billings, which reached $57 million last year. made it an attractive play.
REVShare founder Joseph Gray says the company's proprietary technology will accommodate all kinds of innovation. But the company has built its franchise by playing within the clubby, old boys atmosphere of TV ad sales, where deals are cut discreetly and there is little of the the transparency of online ad auctions. That will serve the company well in the near term, even as the industry prepares for change. - Clifford Carlsen
See Dec. 11 story from Tech Confidential
See Nov. 30 story from Tech Confidential
See Nov. 29 story from TheDeal.com
