RealMedia targets newspapers

Who better to figure out the on-line advertising needs of a newspaper than the former new media director of a newspaper association?

David Morgan, who was once legal counsel and director of new media ventures at the Pennsylvania Newspaper Association, founded Real Media Inc. of New York City in 1995 as a way to funnel web advertising dollars toward newspaper sites. Along the way his company also developed the technology that may soon become the industry's de facto method for handling web site ad inventory.

"Open AdStream is used at over 190 web sites worldwide," said Morgan. "Of that number, 130 are newspaper sites. In the first quarter of 1998, we're expecting 100 more installations."

Though the quality of Open AdStream technology is undisputed, the impetus behind the product's momentum comes from two directions: ownership and alliances.

Real Media Inc. is now co-owned by the Swiss advertising agency PubliGroup (formerly known as Publicitas) and the agency is "aggressively" selling Real Media products and services (including Open AdStream) throughout Europe and South America. But the biggest boost to Open AdStream came in early December, in the form of an agreement with New Century Network under which NCN shifted from NetGravity's AdServer to Open AdStream.

"Even in the beginning, NCN wanted to use our product, but we were competitive in ad sales," said Morgan. "It was essential for them that their ad server was fully networkable, and ours was the only one out there."

As time passed, it became apparent that Real Media's Real Media Network was developing a niche in creating and selling "event" sports web sites -- such as last year's Triple Crown horse racing site -- while NCN of New York City continued to focus on selling banner advertising.

When the two organizations realized that they were no longer competing, the deal was struck.

Also, the Open AdStream product was already installed on a lot of NCN affiliate web sites -- New York Times, Washington Post, Chicago Sun-Times . "If [NCN] had any hopes of having a fully integrated system, they either had to bring in someone else and dislodge us, or work with us," the Real Media founder said.

In addition to Open AdStream's "networkability" -- which allows for multiple Open AdStream servers to work together -- the other unique aspect of the product is its lack of reliance on a commercial database, Morgan said.

"When you're running at high speed, the last thing you want to do is go in and out of an Oracle database," he said. "At most you're going to ask 100 questions, and you can do that internally to the application much easier."

The Open AdStream software allows sites to schedule and run any kind of ad on their site, all the while maintaining an inventory of the ads and where -- and to whom -- they have been served.

"The New York Times site has a full registration database and it's running right now where an ad can be targeted to an individual's profile," said Morgan.

The product runs under nine flavors of UNIX as well as Windows NT. Cost ranges from $10,000 up to $35,000 or $40,000 "with customization." (Of course, Morgan points out, NCN affiliates get a special discount.)

Since the NCN announcement, Morgan said, "the phones and the e-mail have been ringing and firing off the hook." Of those more than 100 installation in the first quarter, Morgan said, only 20 to 25 will be NCN affiliate installations; the remainder will be in Europe.

European newspaper publishers, said Morgan, are taking the Web seriously. "They're throwing a lot of bodies at this because they saw what happened in the United States, with the fragmentation of news web sites. It's good, because they now have an incentive to dominate."

-- dmc

RealMedia Inc., (212) 725-4537, e-mail: rmsales@realmedia.com.

From THE COLE PAPERS, January 1998, Copyright © 1998, All Rights Reserved.