Demand Media Dumps Direct Sales Business

Fully embraces programmatic

Demand Media's direct sales business has bought the farm.

The company has eliminated multiple sales positions as it moves toward fully embracing programmatic ad sales. According to interim CEO Shawn Colo, this move is all about market dynamics.

"We're making a shift from premium display to programmatic," he said. "Going forward, we're not focusing on premium display, and as a result we've eliminated number of positions."

Colo wouldn't say how many. But he was emphatic that today's move shouldn't be viewed as a major retreat by Demand, which has been hammered in recent years by Google's changing algorithm, major departures and the failure of several celebrity-driven brand launches. 

"It really is a strategic decision," Colo insisted. "When we look out three to five years we thought, 'how do we service advertisers and consumers?'" That of course begs the question, what about brands that still want big custom ideas from Demand?

Colo said that the company will continue to service several large unnamed advertisers of that nature. And down the road, the company is planning to up its offerings in branded content to service brands in search of high-impact campaigns. 

But the company no longer needs a full-time staff selling banners. That could be unique to Demand. Or it could mark the sign of a major industry trend. Just this morning, Federated Media, which eliminated its direct sales business last year, moved to split its programmatic and branded content business units.

"We have incredibly valuable commercial categories," said Colo. "I don’t think it’s a rejection of the model or brands. When you look at the economics of brands and display, this is where the market is headed. It's just that people don’t understand programmatic."