CNN’s Deal with Internet Broadcasting Reflects New Realities for Local, National Media

Unlikely partnerships have been forming left and right in the hopes of creating more efficiency in the online ad marketplace, and the alignment of CNN and local TV site network Internet Broadcasting is no exception. In addition to purchasing an equity stake in the TV site publisher, CNN will run Internet Broadcasting’s content on CNN.com, and provide its national and international news coverage to its new partner’s local television sites. The deal allows Internet Broadcasting to package its ad inventory with select CNN.com inventory.

About 60 Internet Broadcasting sites are included in the deal. The company’s network includes affiliate sites in top markets across the country from ABC, NBC, CBS and Fox. Of around 30 NBC affiliate sites in the network, the ten NBC-owned and -operated sites are not included in the CNN deal, most likely because CNN competes with MSNBC. Still, the exclusion of the NBC-owned sites in the content-sharing deal “does not preclude us from doing a larger deal” including those other sites, said Paul Bremer, EVP of Sales at Internet Broadcasting.

The accord gives Internet Broadcasting (IB) sales people the ability to package CNN content with its local network content. “This is an opportunity to go to our advertisers with a national extension for their local marketing efforts,” said Bremer. Last month IB extended its network onto 29 mobile Web sites through a relationship with mobile services outfit Crisp Wireless; however, the agreement with CNN does not include cross-media sales on mobile or television platforms.

IB will sell banner ad packages in select CNN.com inventory and IB inventory, according to Joe Dugan, SVP CNN Digital Ad Sales. “Both companies will continue to work with our respective clients and we will work closely with IB to avoid sales conflicts when contacting new clients. We see this relationship as an extension of our sales team,” Dugan told ClickZ News in an e-mail. The agreement gives CNN a seat on IB’s board of directors, added Dugan.

“This partnership will not impact CNN.com’s ad sales operations or advertising schedules,” he continued.
Local news affiliates have long felt threatened by online news behemoths like CNN.com, but the pair-up allows those smaller sites to provide greater national and regional reach to national advertisers. Bremer stressed IB will not sell ads on CNN.com as a standalone offering. “We’re only selling CNN when packaged with our existing [IB] inventory,” he said. The network sells ads across its national network as well as helping partner sites sell locally.

The financial terms of the deal were not disclosed in detail, although Internet Broadcasting Director of Marketing Kevin Abramson said the company “will have a commission based on what we’ll be selling on CNN.”
Local news content from Internet Broadcasting’s network will be seen on CNN.com’s homepage as well as its U.S. News and other sections. CNN.com’s national, world and political coverage will be distributed on homepages and national news sections of Internet Broadcasting sites. The shared content will be article text, and will include video, according to Abramson.

“This extends the local reach of CNN. It’s a traffic deal for both sides,” said Greg Sterling, principal analyst of Sterling Market Intelligence. “It’s an effort by [local TV sites] to generate more visibility and revenue,” he added.

Internet Broadcasting’s partnership with CNN fits right in with today’s topsy-turvy media environment in which large online properties are aligning with the very local media outlets that have considered them threats. In October 2006, CBS Corporation agreed to distribute video footage from its 16 CBS TV stations on Yahoo, providing CBS with a portion of revenue from pre-roll video and display ads sold through Yahoo to national advertisers. Yahoo also has built up its group of newspaper publisher partners to 15, as part of its ongoing efforts to align with newspaper sites for content and ad distribution.

The deal between CNN and Internet Broadcasting “has similar dimensions to the Yahoo newspaper consortium,” said Sterling. “It’s a reflection of the larger trend to try and get that reach into local markets.”

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