10 Tips for Building Revenue in the Ad Recession

Late last week, my partners and I here at Polaris Ventures hosted a summit for all of our portfolio companies in and around the online advertising sector. In addition to the some 20 portfolio executives that attended, we brought in a handful of senior industry execs to share their experiences, among them Joe Gillespie, EVP of CBS Interactive CBS/CNET; Michael Barrett, formerly of Fox Interactive Media; Carolyn Everson, EVP of MTV Networks; Scott Kurnit, founder of About.com; Stewart Bogarty EVP at Universal McCann; and Polaris entrepreneur-in-residence Brian Grey, who was formerly with Fox Sports Interactive.
Although our meeting had been planned several months ago, the fact that it came on the heels of some highly publicized admonishments by certain VCs to the CEOs of their portfolio companies to slash costs in order to survive the financial crisis provided an interesting backdrop. In particular, attendees of our summit overwhelmingly agreed that expense cutbacks are only half of the story when it comes to surviving the ad recession — the other half is figuring out how to build revenues. In no particular order, here are some tips that came out of the meeting:
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Vid-Biz: Apple TV, CBS, Gigantic

Jobs on Apple TV: Still a “Hobby;” during earnings call Apple CEO says the whole digital living room category is still a hobby, and given current economic conditions, will remain so in 2009. (Zatz Not Funny)
CBS and Saturn Partner for Web Series; Daphne Zuniga stars in eight-part Novel Adventures, where the characters do activities inspired by classic books. (The Hollywood Reporter)
Film Company Gigantic to Sell Movies Online; movies will retail for $3 the same day they come out in theaters. (Variety)
AT&T U-verse Still Going Strong; telco TV service added 232,000 subs in most recent quarter for a total of 781,000; will it reach the 1 million-mark by the end of the year? (GigaOM)
Comcast Laying Off 300; cuts to hit eastern division as part of an overall restructuring and division consolidation. (Multichannel News)
Animoto Launches Service for Pro Photographers; lets users create videos from photos for DVD burning or online distribution. (Animoto)

Metrics: Trouble in Online Adland

PubMatic, a Palo Alto, Calif.-based startup focused on online advertising, just released its PubMatic AdPrice Index based on data from over 3,000 publishers and billions of ad impressions. The findings of this month’s report: The U.S. economic slowdown is beginning to impact online advertising in a big way, with overall monetization dropping by 23 percent — 38 cents eCPM in March vs. 49 cents eCPM in March. Not a big surprise since housing related advertising was big on the web. Even electronics retailers are feeling the pinch and cutting back. Read More about Metrics: Trouble in Online Adland

Online Ads Still the New Black as AdBrite Raises $23M

Update: The buzz on Sand Hill Road these days is all about online advertising plays. Never mind the fact that most of the “online ad” business is living on scraps compared with the Godzilla-like Google (GOOG). The latest testimony to this craze: $23 million in new funding for AdBrite, a company started by Phil “Pud” Kaplan, well-known for his escapades and his iconic site, F–kedCompany.
PE Hub reports that the three-year-old AdBrite got cash from Sequoia Capital and their quasi-affiliate hedge fund, Artis Management. With this new infusion, the company has raised a total of $35 million. We suspect there may be more cash coming their way, as this round might not be closed just yet.
Adbrite issued a press release that lists DAG Ventures and Mitsui Ventures as new investors. BritePic, Full Page Ad, and  Facebook App Channel – have fueled AdBrite’s rapid growth, Ignacio Fanlo, CEO of AdBrite said and claimed that company was the third largest ad-network behind Google and Advertising.com. The round the company says is closed at $23 million.

AOL to Cut 2,000 Employees, 20% of Work Force

Kara Swisher got her hands on a memo sent out to AOL (TWX) employees earlier today from CEO Randy Falco. Here is a summary of what it says:

* The focus is advertising and the new venture, Platform-A.
* New web-based properties, including super-hot TMZ.com, are the focus; he calls it the “publishing business.”
* Not giving up on Access business just yet because it “continues to be profitable, providing us cash flow to invest in other areas of the business.”
* They will cut 2,000 employees, roughly 20 percent of their total work force.

Put simply, my vision for AOL is to build the largest and most sophisticated global advertising network while we grow the size and engagement of our worldwide audience.

Clearly a Black Monday out in AOL-land, and since I have a lot of friends who work there, this is not an easy bit of news to report. Still, AOL needs to do some housecleaning in order to streamline its operations. I wonder, though, despite all the talk about being able to compete in the advertising business, if AOL really has what it takes to duke it out with more motivated rivals like Microsoft (MSFT), Yahoo (YHOO) and of course, big daddy Google (GOOG).