Note in the below article that Zulu rarely comments on anything. Many of us complain that the company doesn't tell us much. Well, here's a trade journal article and the company doesn't even comment to them, as yet. What this tells us is that Zulu is getting its act together. Once the company is secure in its business direction, there will be comments. Until then, we remain in a building phase.
The fact that bluechip clients hold and new ones come on board and the fact that the management team seems today ready in place; both of these facts should give us comfort in our investment. Nothing happens overnight. Giving Zulu a six-month to one-year window to get its act together is, in my opinion, not too much to ask for.
In the meanwhile, the buying opportunity for Zulu stock continues. I certainly intend to keep adding more to my holdings. The following is interesting reading. It's significant that even without a comment, Zulu has standing in the article.
Ad Networks Begin Efforts To Sell Sponsorships
By Nelson Wang
Driven by the need for more revenue and by demand from advertisers, most
of the major ad networks have begun setting up in-house divisions focused on
selling sponsorships on the sites they represent.
According to the Internet Advertising Bureau, revenues from sponsorships
have grown steadily in the past year, rising to $93 million in the third quarter of
1997, representing 41 percent of total online ad revenues for that quarter.
"It's pretty clear that sponsorships are becoming more and more important to
advertisers, particularly those looking to create a strong brand," said Jamie
Byrne, the manager of online marketing and sponsorship development for the
DoubleClick ad network.
DoubleClick recently set up a nine-person team dedicated to developing
sponsorship ideas for the company's sales team to pitch to advertisers. In
some cases, DoubleClick will work with the site and the advertiser to design
how the sponsorship will be implemented, but more often the ad network
would leave that to the advertiser and its agency, Byrne said.
Byrne said that the sponsorship group would likely utilize DoubleClick's
targeting abilities to develop local sponsorships within national sites.
Holiday Sponsors Meanwhile, rival 24/7 Media is starting a group that will
work with its 75 marquee Web sites to identify sponsorship possibilities and
develop campaigns based around holidays like Mother's Day and Valentine's
Day, according to Dave Moore, 24-7's CEO.
"When [sponsors] go in and embed a button or grab a piece of content,
they're finding they're getting a little better result from that type of presentation
than just with banners," said Moore. "From our perspective, we're
mercenaries¥anything that's ethical and makes us money, we're willing to try."
Moore said that he expects as much as 40 percent of his company's revenue
this year to come from sponsorships, although he expects that percentage to
eventually decline as banners become more targeted.
Over the past several months, Real Media, a network that represents about
350 online newspapers, has been making a conscious effort to push
sponsorships over banners, in part because Real Media is able to create
sponsorships that blend national and local content together, such as a recent
sponsorship it arranged of a pro golf tournament with content from Times
Mirror's golf publications and local newspapers.
Selling sponsorships is "a higher-margin business, and it's less likely to
commoditize like banners," said Dave Morgan, Real Media's president. "We
don't have to worry about the $3-to-$4 CPM." Morgan said he expects
two-thirds to three-quarters of his company's ad revenues to come from
sponsorships vs. ad banners by the end of the year, from about one-third
now.
Softbank Interactive Marketing, which was recently bought by holding
company Zulu-Tek and represents some of the top sites on the Web, has
developed sponsorships for Toyota, Visa, and Citibank, among others, but
was not available for comment on its current plans.
Selling sponsorships is more work and more cost-intensive than selling ad
banners, and most networks said they would try to develop standard types of
sponsorships that they could then offer to multiple advertisers. In
DoubleClick's case, Byrne said that the greater amount of resources involved
would be justified by the higher average cost of a sponsorship package vs. a
banner deal.
"For the most part, these will be larger, fixed-fee deals," said Byrne.
But analysts cautioned that networks may face other challenges as well.
"Once you get to [the size of] a couple dozen sites, you don't have
depth-of-knowledge of sites to know what they can do," said Jim Nail, an
analyst with Forrester Research. "It's a difficult model for the ad networks."
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