CBS Interactive Quits Ad Networks

“Don’t create channel conflicts” has always been a guiding principle of CBS’s interactive strategy. The mantra was a factor behind the network’s decision to avoid involvement with Hulu, according to outbound CBS Interactive chief Quincy Smith. And it was in play again this morning, as the company confirmed it will stop working with ad networks and sell its inventory exclusively in-house.

That means no general ad networks, vertical networks, or other third party reps will get a piece of CBS Interactive’s ad space. CBS has positioned itself to compete with these players by emphasizing its own reach courtesy of CBS.com, CNET, TV.com, and its radio and TV content that also exists on the Internet. In October, according to comScore, CBS Interactive reached 59.1 million U.S. users, placing it 12th among Internet properties. Worldwide, CBS claims to reach more than 200 million.

“What we’re saying is, we’ve got the audience, sales force, technical capabilities in-house,” said Neil Ashe, CBS Interactive’s president (Quincy Smith’s replacement). “We have no need for third parties.”

Exempted from the new no-network policy is CBS Mobile, which will continue to sell through ad networks. And CBS will, under certain conditions, continue to traffic its inventory on ad exchanges such as Right Media and Google’s DoubleClick ad exchange.

Indeed, the company’s new strategy was made possible in part by ad agencies’ growing fluency with ad exchanges. That fluency has given rise to so-called “demand side networks,” essentially agency-side ad networks that buy inventory directly from publishers and exchanges, often matching it with third party data to refine and grow audiences on behalf of advertisers. Among the agencies to develop such platforms are IPG’s Mediabrands network and Publicis’s Vivaki digital media unit.

Ashe said CBS will allow its inventory to be sold on those platforms, but only when the ad buyer and any technology vendors are transparently disclosed.

“It’s important to us to have a direct relationship with our most important customers,” said Ashe. “We will work directly with a Vivaki where we know what the partners are and we know what the advertiser is.”

Meanwhile, CBS has repositioned its network-wide ad space as a “premium in-house ad network.” It’s offering demographic, behavioral targeting, and retargeting capabilities across that network. Ads are delivered through an internal ad serving platform called “Madison.” The platform is compatible with third party ad servers and rich media formats.

CBS is not the first major publisher to cut ties with ad networks. Last year, ESPN and Gawker made waves by embracing new abstinence policies with third party sellers.