Seattle-based Rival Networks, which runs the Rivals.com network of
sports channels, has shut down ad sales offices in New York, Chicago,
San Francisco and Los Angeles, laying off 12 employees in the process.
Rivals Network said it would outsource its advertising sales to
Phase2Media, the Silicon Alley advertising and marketing shop known for
its hands-on approach to individual site representation. Financial
details of the deal were not released.
Rival Networks said the decision to shutter the four regional
ad sales offices was based on economics. “[Our partnership] with
Phase2Media enables us to better serve the growing needs of our
advertisers while maximizing the financial success of our company,”
said Saul Gamoran, chief executive officer of Rival Networks.
“With our recent $10 million funding round, we are in a strong position
to meet our long term objectives. We are taking strategic steps to
maximize our resources and work as efficiently as possible to meet
those goals,” he added.
The move to outsource ad sales after having established an internal
sales force may be a harbinger of things to come in the Internet
advertising industry. As Internet publishers’ growth curves were
heading steadily upward, industry-watchers questioned whether rep firms
like Phase2Media, DoubleClick and 24/7 Media might lose clients as
publishers brought sales in-house. Now, the tide may be turning in the
other direction, as ad dollars dip and publishers seek to focus on their core
competencies.
Phase2Media has already made inroads in the sports content space,
counting clients such as the Olympic Committee and the National Hockey
League (NHL) as clients for Internet ad sales. Other clients include
the Elle Interactive Network and Maxim Magazine Online.
Rivals.com is funded by VC firm Hummer Winblad Venture Partners, Intel
Corporation, News Corp.s News Digital Media, The Phoenix Partners and
Softbank Capital Partners. Its network consists of more than 500
sports-related team and channels.
