NEW MEDIA: SPOTLIGHT ON ONLINE MEDIA SALES - Should internet media owners only sell space on their sites?

IDS isn't the first to give up on selling third-party web media, Alasdair Reid says.

When the Flextech media sales division, IDS, pulled out of third-party online sales last month, it was not hard to find hardened members of the digital community nodding sagely and sucking their teeth. Here, surely, was another sorry tale of the troubles you can bring upon yourself if you ignore all that wise advice about sticking to your knitting.

To hardline digital separatists, broadcasters will always be the arrogant fools who are likely to waste everybody's time and their own money before admitting that they can't cut it in the online world.

For the record, IDS had been selling commercial opportunities on the 78 football websites (basically, clubs from the leagues below the top Premiership tier) run by Premium TV, a subsidiary of Flextech-Telewest's business partner, ntl. The contract will go to the winner from a shortlist of three - the online sport specialist Aura Sports, and two of the big generalist online sales houses, Real Media and AdLink.

Inevitable, really, say some. In ducking out of online sales, IDS joins a dishonorable roll call that includes Channel 5, TSMSi and Carlton. The simple fact is that when broadcasters have tried to set themselves up to sell advertising on websites that they do not themselves own, they've failed. This is strange given successes in putting together cross-platform deals on their own properties. Such as Channel 4 and Big Brother, for instance.

Charlie Dobres, the chief executive of i-level, says: "So many have tried it and the attitude was always that if anyone's going to get this right, then they will. In actual fact, Channel 5 came in to see us when it was selling online and it was very impressive indeed. It told us all sorts of consumer and audience profile stuff about the market that we did not know. Its whole approach was excellent in the sense of giving something before asking for something in return. So that was kind of hopeful."

"What let it down was that the volume wasn't there to justify learning the total skills base that you need in terms of selling the medium and the technological understanding. Compared with TV, it is time-intensive and the return is smaller. It's just not economical for non-specialists to get involved," Dobres continues.

"But from a boardroom perspective at TV companies, especially if we go back to the dotcom days, it must have looked at all the money being thrown about and thought to itself that there must be a pretty good living to be had here."

They also continued to underestimate an inescapable yet perverse fact about the online world - that 80 per cent of revenue goes to a mere ten sales points. If you can't change that dynamic and you want to make a living from the remaining 20 per cent of the market, you have to be able to represent a hell of a lot of sites.

But hang on. Isn't the whole media world meant to be converging? Aren't the lines between on- and offline electronic media becoming blurred? And isn't this a world in which the broadcasters - who have a better inside track where bigger advertisers are concerned - come into their own? Granada has a well-respected online sales operation, although again, it now sells just for ITV or Granada properties (it is involved on both the content and advertising sides for the websites of two of England's top football clubs, Liverpool and Arsenal, but it is a shareholder in both clubs).

For John Doyle, Granada's director of interactive and online sales, it's about extending existing advertiser relationships. "Clients are always interested in new development areas and they tend to see them as icing on the cake. We are dealing with an increasing number of television advertisers who are going beyond spot."

Viacom, the owner of the Nickelodeon and MTV families of channels, is also finding this. Paul Curtis, the sales director of Viacom Brand Solutions and previously at Channel 5, says: "In terms of the MTV and Nickelodeon properties, they are very successful indeed because there is no divergence between who the TV viewer is and who the internet viewer is."

The Viacom sell is now thoroughly integrated across all possible platforms.

"If you are talking about the 16- to 24-year-old age group you can't make distinctions any more. It is all media - and, increasingly, agencies are structured to see things in that way too. At Channel 5, we were successful in cutting through all that techie jargon that really put advertisers off but we made the mistake of overestimating what was possible over the short term."

Doyle says the knitting wisdom holds good. "We never went crazy in the first place and we got out of things quickly when they didn't work, but, yes, I think we need to stick to our knitting. Third-party representation is just not core to our proposition," he admits.

Which is very wise indeed, according to Richard Holman, the managing director of one of the biggest online sales networks, AdLink. He states: "The representation role is a highly skilled and specialist business.

The broadcast guys thought they had skills in selling advertising. But that is only one part of the role of sales houses. You need different account management and service skills and you certainly need the scale to make it a business. Broadcasters were ignorant and arrogant enough to think they could do better than the people who had been making a success of this business. They couldn't."

"The other point is that they were never interested in growing the market - merely in growing themselves. The people who are genuinely interested in growing the market will shape that market," he adds.

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