We recently reported that Allhiphop.com signed a 5 year multi-million dollar exclusive ad deal with Radio One’s Interactive One. On the surface the ad deal looked like a win win for both companies. AHH, gets rid of the burden of searching for ad inventory by teaming up with Radio One’s well connected urban radio ad sales division, while Interactive One further extends their internet ad reach. Sounds like a perfect match right? I am not convinced.

AHH’s primary revenue stream is now in the hands of relative newcomer in the online advertising business. Radio One is a proven leader in radio ad sales in the urban market, but has not really reflected its radio ad sales success online yet. It’s not that I doubt Interactive One’s ability to draw advertisers (I’m sure their rolodex is filled with the who’s who of urban advertisers) but I do think that AHH generates too much traffic to settle with an ad group who has limited experience in online ad sales. Interactive One’s recent acquisition of Community Connect could bring some experience to their online ad sales division, but can AHH afford to wait for the two companies to synergize? And even after the two companies integrate, where do you think the large majority of Interactive One’s time and resources will go? Will they be focused on monetizing their own web properties or AHH?

Ad sales at AHH’s level is not just about filling advertising inventory, it’s about working with advertisers to create branding and sponsorships campaigns (the real money in web advertising). In the original press release, Interactive One stated they would act as AHH’s ad sales representative. But as you read on it seems as if Interactive One is interested in combining AHH with the rest of their online web properties to create one large advertising network (big difference). If this is the case, AHH is sure to suffer. Ad networks spread advertising campaigns and proceeds across a number of different web properties. The campaigns are usually very broad, and work well for medium and small web publishers who don’t have the traffic to single-handedly tackle larger campaigns. AHH is one of the most widely read online Hip-Hop publications serving millions of monthly unique visitor surpassing the need to “split” impressions and revenue.

Another possible consequence of the AHH deal is the lose (potential lose) of the relationship with their advertisers. In the media business the second most important relationship you have, behind the relationship of your reader, is the relationship with your advertisers. Without advertisers, there’s no money, without money there’s no power, without power there’s no respect (cue Lil’ Kim). While AHH focuses on content, Radio One is building direct relationships with the advertisers at AHH’s expense. Keep in mind that Interactive One’s primary business is content creation. AHH’s power is relinquished and Interactive One can use those relationships to compete within the same space.

I am not against ad networks, but I guess I am against exclusive deals with inexperienced ad networks that compete within the same space. Maybe I’m just trippin’. What do you think?