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Engage Unveils B2B Advertising Network

CMGI's Engage Inc. jumped into the business-to-business advertising space on Monday, unveiling its new B2B ad network -- Engage Business Media.

The division, to be headed up by former Adsmart vice president of marketing Joanne Currie, is an outgrowth of Engage's acquisition of Adsmart and Flycast Technologies. The combination of the three companies freed Currie to pursue an idea she'd conceived while at Adsmart.

"We were starting to see that our advertisers were trying to reach a market that we couldn't provide for them," said Currie, explaining how the problem had given her an idea for a solution.

The new Engage division will go after major advertisers aiming to reach the small office, home office (SOHO) market, as well as more specialized marketers seeking particular verticals. Engage Business Media is concentrating on twelve verticals -- automotive, agriculture, building & construction, chemical, food, health care, hospitality, information technology, legal, printing, SOHO, and telecommunications.

It's not surprising that Engage has chosen to chase this market, and we'll likely see DoubleClick and 24/7 Media nip at its heels. Like more-established player B2BWorks, Engage is after the big dollars commanded by marketers seeking to reach the highly-targeted audiences reachable on B2B Web sites.

The entry of Engage into the space, "signals, of course, the great opportunity in this area," said Bill Furlong, president and chief executive officer of B2BWorks.

The AdRelevance division of Media Metrix said the number of B2B companies advertising online from October 1999 to February 2000 grew 58 percent, compared with average of 17 percent for all other industries. Forrester Research predicts annual online B2B advertising spending will reach $2.5 billion by 2002.

Besides selling space on Web sites, most of which get between 25,000 and 200,00 impressions a month, Engage Business Media will also sell e-mail newsletters to these audiences. Because of the small numbers of impressions involved, said Currie, these vertical players are unlikely to have their own internal sales forces, so they're more likely to depend on outsiders like Engage.

The network, which launched on March 15 and consists of 78 sites, includes companies like e-Steel, BevNET.com, LawForum, and Dirtpile.com. The sites represented include industry exchanges and marketplaces, as well as content sites focused on particular industries.

Interestingly, the Engage division is following what it calls a "cost-per-lead" model, which translates to a "cost-per-click" model in the consumer space. Company execs said they came up with the pricing concept by looking at how business was done at trade publications. Engage Business Media expects to charge between $8 and $20 per-lead (or per-click). At a one-percent click-through rate, and a $10 CPC, the effective CPM is around $100.

The Engage division follows ad network B2Bworks into the space. That company launched in May 1999 and represents 325 Web sites in 50 vertical markets. Its model is based on CPM pricing, and it charges between $60 and $150 for banners. But the company is also striking some cost-per-acquisition deals, and some hybrid deals. Newsletter ads cost between $100 and $200.

The core sites in the B2B