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Online Advertising Articles
(May 2001)

Clear Blue Media Clouds Over
Written by Joshua Smith

The ruthless shakeout of the online advertising sector has claimed yet another victim this week, with confirmation of Clear Blue Media's demise arriving today.

Where this story varies from many of the dotcom doom tales that we've heard of late is that Clear Blue Media showed real promise, both in terms of the flexibility and support offered to their advertising and publishing partners, and in regards to their seemingly solid business plan. Unfortunately, angel and venture funds punishing those who rely on online advertising more dramatically than any other tech businessed, this firm was unable to weather the sustained weakness in the market for CPM-based ads without becoming a mere shadow of its former self.

In statements made to MediaPost earlier today, CEO Phil Pennington noted that the high costs associated with outsourcing their ad serving solution (this was handled by Engage's AdManager) made it impossible for the firm to satisfy its clients' ruthless bargaining during this unbalanced buyer's market. He also noted that it had become increasingly difficult for Clear Blue Media to attract traditional marketers to its service, since its core publisher base lacked the name-recognition that its larger competitors possessed. Those familiar with Clear Blue Media may have noted earlier this month that the company's website had been overhauled to reflect a new business plan wherein Clear Blue Media stated its ongoing intent to support only heavily trafficked, branded properties. The reason for this has now become apparent, though unfortunately, this last-ditched attempt to attract major partners seems to have come too late, with the firm to serve its final banner at the end of this month.

Following, you will find a copy of the firm's virtual eulogy, delivered via email to its many publishers.

Dear Clear Blue Media Publisher Partner,

I regret to inform you that Clear Blue Media will serve its last online advertisement on May 31, 2001.

As you are well aware, the online advertising market continues to degrade with no bottom in sight. The average CPMs (cost-per-thousand) we received at this time last year was above $2.00. We predicted that these rates would fall and calculated that Clear Blue Media could survive a 50% drop in CPMs. These days, the majority of new proposals and contracts we receive are requesting rates on a CPA (cost-per-acquisition) basis or for extremely low CPMs (less than $0.50). The reason for this is simple enough -- supply and demand. There is too much available inventory in the marketspace and a severe shortage of quality, paying advertisers.

We believe that only extremely well funded companies with significant cash reserves will be able to survive this market cycle, and unfortunately at this time Clear Blue Media does not meet this criteria. Over the past three years, Clear Blue Media has delivered billions of ads for our clients and paid millions of dollars to our member publishers. We are proud of what we accomplished, and our reputation in the industry with both our advertisers and our publisher partners. We are also proud to have had your participation in our company and offer our sincerest thanks to each of you.

Wishing you the best of luck in the future and our regards,

Phil Pennington
Clear Blue Media


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