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Mode Media Closes, Signaling Crash of Display Networks?

The New York Post revealed today that Mode Media, once known as Glam Media was going to shut down. Once billed as the premiere women’s lifestyle network, it was living on life support the last year after suffering an enormous loss of traffic that was never made up. Worse, it is reported that they owe writers and publishers an enormous amount of money, many of them possibly illegal independent contractors who were paid commissions but no salaries.

Mode Media asked employees and contractors on Thursday morning, as per The Wall Street Journal. In an update, representatives were told the California-based organization had been looking looked for financing for as long as five months and was kinda sad that they weren’t paying the employees

Mode Media was established in 2004 as Glam Media, and was renamed and rebuilt to showcase fashion two years prior. It was positioned the tenth biggest advanced media organization in the U.S. this year, matching sites like AOL and Condé Nast.

Whatever happened over there, it wasn’t from lack of traffic or an audience. According to comScore it had over 125 Million unique visitors.  For whatever reason, despite the heavily targeted female audience, it didn’t translate into continued ad dollars.

It also might signal that the online marketing community can’t survive in New York, one of the highest rent markets in the United States. In the last few years, many media companies had been leaving the Bay Area to Los Angeles, and even places like Las Vegas and Phoenix – in order to get cheaper rent and more competitive employees.

Instead, Mode Media tried to use a network of sites and independent contractors to leverage, but still was not able to sell advertising on its extensive network.

While the amount it owed publishers wasn’t revealed, one expert said it was almost six months of revenue that was owed — as much as $100 million if not more. There is no word how other companies will be paid, perhaps causing a crash of other display networks and publishers who were owed money by Mode.

It wasn’t a surprise that Mode Media was going to close, as most of their top executives had left the company recently, signaling that something wasn’t kosher over there.

Pesach Lattin
Pesach Lattin
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pesach Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.


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