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

Works advertising network are the online versions

of print trade publications, like AviationWeek.com and Hbrnet.com. As a

network, it gets 60 million pageviews, with 16 million unique visitors,

every month. Its investors include companies involved in trade publishing,

including PRIMEMEDIA’s IndustryClick, R.R. Donnelley & Sons, and IDG

Ventures.


Although B2Bworks was first to market with its network, Engage Business
Media’s Currie says she believes the new division’s relationship with

Engage will give it an
advantage. Currie cited the parent company’s relationships with top
advertisers, its large sales force, and its ad serving technology.

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