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July 23, 2008

Sugar Scraps NBC Ad Rep Agreement, Creates In-House Sales Team

Sugar Inc., operator of PopSugar and 14 other sites aimed at women, has nixed its ad sales relationship with NBC Universal and brought those functions in-house. The company is now in the process of hiring a 20-person sales team along with a VP of sales who has yet to be identified. The move comes just a year after Sugar agreed to let NBCU package and sell its inventory alongside that of iVillage.

A blog post about the decision gives little indication as to Sugar's precise motives, though it's common for maturing publishers to create a sales team as soon as doing so becomes feasible. That's because ad network or reseller relationships typically give the seller a cut of between 20 and 40 percent of revenue. (Update: Sugar PR said yesterday NBC had a 50 percent cut)

When Sugar fell in with NBC last summer, CEO and Publisher Brian Sugar told ClickZ the firm wanted to build out its own sales staff from the beginning. However, he said, "we realized it takes a large, experienced team to really execute on that. We, as a small company, had to make some decisions early on."

NBCU brokered deals for Sugar with brands such as Neutrogena, HGTV, Red Bull, Baileys, and AT&T, according to the blog post.

NBC Universal retains an investment stake in Sugar.

Posted by Zachary Rodgers at July 23, 2008 3:34 PM

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