AOL, IAC’s CitySearch In Local Advertising Deal
Valentine’s Day is a perfect occasion to get together, which AOL and IAC’s Citysearch will do with local content and advertising…
“Amidst all the secret talks of mergers and deals between the top search players, not to be left out in the race to grab advertising dollars, AOL made a deal with IAC to tuck content and performance-based advertising from Citysearch across AOL properties…”
New York — Time Warner Inc.’s Internet division AOL announced on Thursday that it has formed a partnership with IAC/InterActiveCorp.’s Citysearch to share local content and advertising resources.
“Under the deal, AOL will begin featuring local content and pay-per-click ads from Citysearch across its own AOL CityGuide properties, which have long competed directly with Citysearch.”
Content will include Citysearch-produced editorial on local merchants, along with user reviews, videos from merchants and promotions to be distributed will be accessible on AOL CityGuide, AOL Local Search and MapQuest.
“AOL will in turn open its sites, visited by 57 million unique users per month, to Citysearch’s local advertisers.”
“It basically allows them (AOL) to take advantage of the economics of local advertising without having to invest in a local sales force as extensively as we do,” Jay Herratti, chief executive of Citysearch, said in a statement.
Citysearch gains targeted inventory and reach for their advertisers, and AOL gets Citysearch content and a share in the ad revenue.
“AOL has the largest local online network and this partnership gives us the ability to enhance our local experience, expand our reach by incorporating Citysearch’s rich local content in our numerous local sites and improve monetization of our local properties through Citysearch’s local advertising network,” John Kannapell, SVP of AOL Search, said in a statement.
“The combination of the enhanced content and reach into new markets will also increase the premium local advertising inventory available to advertisers through Platform-A.”
Local advertising is viewed as an Internet growth area, as smaller merchants and services grow more comfortable with the technology involved and realizes the potential gains.
“I join our sales reps on calls at least once a month and I go and visit with merchants. It is still amazing to me how early we are in that process,” Herratti said.
Local online advertising has a rising-tide quality to it. Jupiter Research anticipates a faster rise for local advertising than the overall online ad market through 2012.
The deal comes at a rough time for the New York-headquartered parent companies as both attempt to invigorate their focus on ad revenues. The struggling AOL may be split into two businesses to separate its once-ubiquitous Internet access service from its ad-supported media properties.
IAC, meanwhile, is spinning off its retail-oriented brands and keeping its digital media properties intact.
“The move is under close scrutiny from Wall Street, which expects it could eventually lead to a sale or spin-off.”
Citysearch, along with properties like Ask.com, Evite, and Match.com, will be part of the “new IAC.”
“Meanwhile, Citysearch will incorporate inventory from those properties into its own local advertising network.”
Though it is easy to fall back to PR-speak and call the deal a win-win, the agreement does offer both sides a complementary advantage. AOL gains more content, Citysearch receives more chances to deliver performance-based ads and thus more opportunities for conversions.
Financial terms were not disclosed, but both companies expect to reap higher revenue from the deal.