FM Builds War Chest

NEW YORK The way Federated Media Publishing executives view the landscape, Google has in some ways cursed the Internet. While search advertising has proven tremendously successful, it has also relegated online ads to purely direct response. "The industry has innovated toward only one goal: to get people to click on ads," said FM publisher and chief revenue officer Chas Edwards. "Not enough time has been spent figuring how to make ads effective when people are clicking on them." Now, the blog network has closed a $50 million funding round with plans to expand its services for independent Web content creators and build new ad programs for brand advertisers. Oak Investment Partners led the funding round for the company, which says it is profitable. Omidyar Network and Panorama Capital also participated. The extra money is earmarked for expanding the pool of 150 blogs FM works with, as well as offer new publishing services for them. FM has built programs for advertisers like Cisco, Microsoft and BMW that go beyond display units. For BMW, it is running a promotion with Facebook application Graffiti Wall that lets users virtually draw on a BMW 1-Series and share their creations. The contest has received over 9,000 entries. FM also had some of its bloggers, including company founder John Battelle, contribute content to American Express' Open small-business site. Some initiatives have gone too far for a few of FM's bloggers. A Microsoft program last summer in which FM creators contributed stories on how they became "People Ready," the tagline for Microsoft's campaign, met with criticism. Om Malik, one of FM's more prominent contributors, disavowed his participation in the campaign, promising readers to turn down similar opportunities in the future. FM hopes the programs differentiate the company from other ad networks and rep firms. Like all networks, it runs the risk of losing publishers that take their ad services in-house. That happened with popular link-sharing site Digg, which struck a deal for Microsoft to sell its display ad inventory. FM continues to work with Digg on integrated programs. FM offers its content creators, which include Boing Boing, Ars Technica and Silicon Alley Insider, a 60 percent share of revenue. It plans to use some of its new funds to help its stable of creators expand their features. For example, it worked with Boing Boing to create a video series that follows quirks in online culture. FM plans to expand its services to help its publishers put on events, Edwards said. "We need to invest in our existing publications to enhance and expand their brands and franchises," Edwards said.

Performance Marketing

FM Builds War Chest

Brian Morrissey

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Brian Morrissey