Scot McLernon, EVP of Sales & Marketing at CBS MarketWatch and Jeff Lanctot, Chief Media Strategist at Avenue A, provide insight into this new consortium.

On Monday, five of the nation’s best-known online publishers announced the formation of an advertising sales consortium known as the “At-Work Brand Network.” Developed to reach the at-work audience that traditionally has been a difficult audience for advertisers to reach, the Network provides advertisers with the efficiencies of a one-order, one-report system, compared with dealing with five separate publishers. The agency or client only needs to submit their creative advertising units to one party for distribution across the entire Network.

The Network includes CBS MarketWatch, CNET Networks, NYTimes.com, USATODAY.com and weather.com. According to Media Metrix, the five sites in the At-Work Brand Network provide advertising clients with an at-work audience of more than 17 million unduplicated individuals. This represents over 43% of the total at-work online audience.

The Network kicked off with a four-week, three-part campaign for AT&T Wireless. The first phase is a high-awareness campaign, utilizing a lot of full-page takeovers, large ad units, and Flash creative. The second phase will be “recall messaging” that reinforces the offer, which is an online-only offer by AT&T Wireless for a free Panasonic Versio phone or $150 off a Motorola V60 phone when a consumer signs up for new AT&T Wireless service. And then phase three is going to be another high impact take-over campaign that reminds consumers that the offer is ending soon.

iMedia Connection talked with Scot McLernon, EVP of Sales & Marketing at CBS MarketWatch and Jeff Lanctot, Chief Media Strategist at Avenue A, interactive agency of record along with Whitehorse for AT&T Wireless, about the initiative.

iMedia Connection: How did this come about? How did these five sites get together to do this?

McLernon: I have relationships with the other VPs of sales -- it’s a small industry in some ways -- and the fact that we’re all members of the Online Publishers Association just brought us all a little closer together. Also, we have some like-minded principles in that we always want to get creative and push the envelope in terms of what this medium can do.

Back in January or February, I was looking at the fact that there was a lot of print money being spent to reach the voters in the Compaq/HP merger. When I say a lot of print money I mean full-page ads in the Wall Street Journal and the Washington Post and the New York Times and USATODAY. I wasn’t getting any of this money, but I knew the readers of my site were clearly interested in how that vote was going to go. But the advertisers felt that they were reaching and making noise with these full-page print ads. Well I went to the New York Times VP of Online and I went to USATODAY’s VP of Online and said, ‘Hey, are you guys getting any of this money?’ And I knew they weren’t because you can do an AdRelevance search. And sure enough they admitted, no they weren’t, and their sister publications were getting these full-page ads.

So we said, what if we were to do something like create a morning news-read roadblock, for which we were to do some intro messages and introstitials and interstitials that would clearly get the attention of folks who have come into the office. We’ve got all these studies that show that the at-work audience is huge, that day-time is prime-time on the Web, and let’s, for the same money that they would spend for a couple days of print ads, give the advertisers a four-day morning news-read roadblock. Well, end of the story is we definitely got the attention of the agency but we didn’t get the buy. But the consortium remained and the idea remained and we thought, this is still a good idea. Everyone we talked to thought, oh man, that’s a great idea. That’s something that has not been done before, it can’t be done any other way, and let’s add on to that idea and let’s create one point of order, one point of billing, one point of tracking and aggregation, and one point of creative. And when the right client comes along we’ll know it. And sure enough Avenue A thought this was a spectacular idea and so they asked us to build something for them that they couldn’t do in a series of one-offs.

iMedia Connection: Jeff, how did Avenue A/AT&T Wireless get involved with the launch of the Network?

Lanctot: The five publishers that are involved are ones that we’ve worked with a lot and have become really trusted partners for a lot of our clients and for Avenue A. So we have a track record of success with them. I also think that they recognize us as being certainly one of the largest advertisers online, third biggest agency in terms of online purchasing, and also an agency that is always looking for new and exciting opportunities for our clients. And certainly I think that this opportunity fits the bill here.

iMedia Connection: Why was this a good fit for this client?

Lanctot: In general, we think that the Internet works very well for multi-channel retailers like AT&T Wireless. It allows an advertiser a great opportunity to introduce a product or make an offer, but also gives consumers a chance to then follow up and research a product and make an educated buying decision. So online advertising makes sense. Also, the at-work demographic is a very desirable one, certainly for AT&T Wireless and for countless other advertisers as well. The Online Publishers Association study made it clear that the at-work user base is a very affluent, well-educated demographic relative to the online population as a whole. The proportion of 18- to 34-year-olds is significantly higher at work than at home. Income is higher among at-work users. So for a variety of reasons, the demographic was very attractive. The reach that we got with these five publishers was significant – nearly 50%. And certainly the brands of these five publishers we’re associated with was attractive as well.

iMedia Connection: Scot, how does this get sold?

McLernon: Each sales department is trained about this. What we do is, we take a look at the various needs of a particular client, if those needs are true to the Network, then what we’re happy to do is build a proposal, the five of us, on what the creative element would be, what the day-part, if applicable, may be, what the ad solution or solutions should be, and build a proposal based on the specific needs and objectives of that client. As this gets closer to fruition, then a third party needs to step in regarding pricing and then negotiation with our third party will take place.

iMedia Connection: How does the pricing work?

McLernon: Very carefully! Basically, if you know what the budget is, then you know what your pricing is going to be based on the amount of impressions or the percentage of that budget that you’re going to receive. So let’s just say it’s a million dollar order, and that’s split up between the five of us. So it’s $200,000, you know where your pricing needs to be for your own personal placing and so that gets submitted to a third party. The third party then works out some negotiation with the client and then you’re off to the races.

iMedia Connection: It seems logistically difficult to coordinate the billing and serving details, isn’t it? Is that where the third party comes in?

McLernon: Yes. The third party comes in for the negotiation and the billing. In terms of the ad serving, over here at MarketWatch we took all of the creative and then we distributed it out to the consortium. So that really isn’t that difficult (that’s easy for me to say, I wasn’t the one handling all of the creative!).

To some degree, we built the plane as we flew it so that you don’t know – you’re absolutely right; logistically there were an awful lot of speed bumps along the way, business terms, etc., but that’s expected the first time you do something like this. But now that we’ve done it once, we now have a system in place and we have a lot of things written down, we have process put in place, and we understand what those speed bumps and hurdles are now so we can prevent any of them in the future. I think what we have is a very nice system in place. We’re prepared to handle number two, number three, number four, number five.

iMedia Connection: Jeff, from your standpoint, what were some of the stumbling blocks?

Lanctot: I think it was, there are five publishers who operate completely independently so I think naturally there are going to be some questions about, legally, how do they work, how does billing and payment work. So I would loosely say there were a lot of legal issues that we had to work through about how best to set this up to provide, certainly protection for all involved parties, but also make it as manageable and operationally efficient as we could. I think that going forward on a permanent basis you’ll see that the five sites and probably others that get involved in a similar manner will have that taken care of. There was nothing for which I would fault any site or anybody else, just the usual legal maneuverings and negotiations that you expect when you’re first.

iMedia Connection: As I said to Scot, from the outside it sounds like it could be a logistical nightmare but it sounds like it actually worked pretty well this first time through, do you agree?

Lanctot: Yes. To be honest with you, if you would have called me two months ago and said, ‘This is what’s going to happen,’ I probably would have said, ‘You’re crazy.’ But they’ve pulled it off, we’ve pulled it off and the five publishers in particular are to be applauded for recognizing the value that this would bring and really putting aside any potential competitive issues. Because certainly they all want advertising dollars, they all want some of the same users, but they put that aside and really came up with a program that I think is a big step forward for the industry.

iMedia Connection: Scot, did all of the publishers already have the same ad standards?

McLernon: Very similar. I would say that two of the five have almost exactly the same ad specs on a couple of the ad units and for the others, the spirit of the ad units -- the introstitials or the intro messages that we launched -- is similar. But it’s still the wild, wild Web and so everyone is still defining what the advertising units are going to be either across the Web or in their individual sites. But we’re getting close, or closer.

iMedia Connection: Are there other publishers who will join the network? Do you want more publishers?

McLernon: The original four were CBS MarketWatch, CNET Networks, NYTimes.com, USATODAY.com. And then we were really pleased to offer and then add weather.com to come in and join us because that put our reach to 43% of the at-work audience. And so depending upon what the needs are of the clients, there could be another addition or two.

iMedia Connection: What if an advertiser just wants four out of the five in the Network?

McLernon: That’s a question we wrestled with. We have to remember who pays the bills here and whose objectives are most important here and that’s really the client. So based on the client, we determined that if three of the original At-Work Brand Network sites are included, then we’ll allow them to use the name. Then the same spirit would be intended.

iMedia Connection: Any network ad revenue projections you can share?

McLernon: I can share that we have three more that we have had active conversations with, that are very interested. I think there could be as many as five. I think we want to do this slowly; we want to make sure it makes sense for everybody – makes sense for the sites as well as makes sense for the clients. We want to determine what’s the appropriate size to make sure our advertisers are getting the best bang for the buck. The projection is that we’re very enthusiastic about it. Each one of the sites is excited that it has launched without much of a hiccup along the way here. And I think you’ll be hearing more from us over the next couple of weeks.

iMedia Connection: Jeff, from a buyer perspective, what do you see as being the advantages of using the Network?

Lanctot: Reach is definitely one of them. The other thing that I think we’ll see over the long term is that there will be some real operational gains by standardizing things the way they’ve done. Certainly, as a first agency to launch a campaign on the at-work network we experienced some operational struggles and that’s just part of being first. We expected it, we were a very involved partner from the start and wanted to and expected to go through the struggles. However, I think the OPA member sites are very committed to streamlining and standardizing the process going forward. We saw, just their coordination of creative specification and execution was excellent. It was a huge step forward and I think we’ll see more of that in the months to come.