$10B Ad Bet – and Counting

Posted by Sam Churchill on

We are heading, all of us, into a historically turbulent moment in the history of media, with the very real risk of disruption on a mass scale. Call it the Chaos Scenario. — Bob Garfield

Microsoft today announced a $6 billion acquisition in Seattle-based Aquantive. Aquantive owns Razorfish and other online advertising companies. They deliver on-line ads and campaigns, along with direct e-mail marketing and search engine optimization.

Valley Wag sums up the recent $10 Billion acquisition spree in interactive advertising. Microsoft’s deal for Aquantive, is twice as expensive as Google’s $3B purchase of Doubleclick just last month.

Only a year ago, Microsoft launched AdCenter, its own advertising network. Executives said aQuantive’s assets will complement Microsoft’s own.

Microsoft is a partner in MetroFi’s “free” municipal wireless service in Portland, providing advertising hardware, software (and advertising). While MetroFi can target ads by region, city and zip code, Microsoft’s adCenter can detect a customer’s location by their IP address and then display relevant local ads based on that location (AdCenter Blog). Microsoft will provide the Web page greeting users at log on and include localized search and mapping.

In related news, RCR News reports Verizon Wireless will combine its advertising and marketing efforts with that of parent company Verizon Communications. The combination of Verizon Communications and Verizon Wireless’ $1.9 billion advertising and media business marks the first time that the two telecommunications divisions have merged their marketing functions. To date, Verizon Wireless has operated largely independently from its wireline parent company.

The carrier’s newly combined marketing effort will be headed by Interpublic’s McCann WorldGroup. AT&T has said that 20% of its savings from the BellSouth merger would come from advertising and marketing savings.

Om Malik sums up the summing up:

In 2006, according to Internet Advertising Bureau, the advertising revenues reached an all time high of $16.8 billion. In comparison, $11 billion has been spent by various players in buying out ad networks. Don’t be surprised if this number rises even higher. Welcome to the mad-money phase of the eyeball boom!

National CPM (cost per 1000) rates:

  • Newspaper (1/2 page B&W) $ 19.20
  • Spot TV (30 sec. primetime): $ 16.25
  • Magazine (1/4 page color): $ 8.00
  • Radio (30 sec. drive time): $ 4.95
  • Traditional Billboards: $ 3.00
  • Mobile Advertising: $ 0.90

Related DailyWireless articles include; CBS: Free Mobile Content, NAB 2007: Dead Man Walking?, NewAssignment.Net, Portable Media: Fee or Free, Newspaper Beats TV in Ads, Datacast This, Sputnik Provides Location Ad Option, Mobile Search War, Bob Garfield’s Post-apocalyptic Media World and
Portland MetroFi Update.

Posted by Sam Churchill on Friday, May 18th, 2007 at 8:46 am .

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