A Futures Market For Online Ads

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With every passing day, the computer display steals more eyeballs from the TV screen. So why do TV ad budgets still dwarf Internet ad budgets at major corporations? One reason is that major corporations are simply more comfortable with how TV advertising is done. TV ads are sold well in advance, because most TV shows are made well in advance. The Web, by contrast, is constantly in flux. Nobody knows what tomorrow's content will be, much less tomorrow's ad prices. Behemoths like to move slowly but surely, and the Internet is anything but slow.

But a company called Brand.net thinks it has found a way to make online marketing more like TV marketing—and capture some of those TV ad dollars in the process. Yesterday Brand.net launched a new buying system that lets companies buy Internet ads many months in advance, as in the world of television, reports AdAge. Brand.net's platform forecasts what online ad prices are likely to be on a future date in a given category of websites ("entertainment," for instance). Brand.net makes a deal ahead of time with buyers, but doesn't buy ad space until the date in question. If its forecast was low, then Brand.net takes a hit. If the forecast was high, Brand.net holds on to the difference.

The object isn't to convince companies to buy high in advance. Brand.net's COO Andy Atherton insists the ultimate goal is to make the tool as accurate as possible. "If we're pricing too high, then we're gonna get no volume," Atherton tells Fast Company. "There's significant pressure to make sure our prices are always competitive." A spokesperson, Ali Weitzman, kept mum on the proprietary software Brand.net uses, but characterized it thus: "It looks at patterns, it looks at historicals, it looks at trends," she says.

The tool has garnered the attention and business of some marketers already. Digitas, for one, has bought online ads for Mars Co. It's too soon to say if Brand.net has the magic formula, but by marrying the dynamism of the Web with the predictability of a TV-style forecast, tools like this could be vital to the future of advertising.

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