Big is over, portals are past

In its story about the latest failure of AOL to find a strategy, the Times repeats a bit of big-media conventional wisdom that should be abandoned: that big is where it’s at and portals are a winning strategy. The Times calls the failure of the AOL portal strategy a “quirk” when it should call this a lesson:

The company’s challenges highlight one of the quirks of today’s Internet market. As advertising is moving from offline media to the Internet at a rapid clip, portals, which command some of the biggest audiences online, should be among the top beneficiaries. Instead, the travails of the mass market portals like AOL, as well as Yahoo and Microsoft, indicate a decline in power.

Once and for all: The size of the site doesn’t matter to advertisers. Oh, yes, they still think its matters and for a time that’s still how they buy, by reflex. But get this straight: Just because a site has 100 million users, that doesn’t mean 10o million people see your ad. It’s not TV. Repeat: It’s not TV. The only people who will see your ad are the ones who see the page on which it appears. If you buy 10,000 impressions, aka eyeballs, you can buy them on a big site or a bunch of small sites, it doesn’t matter. Big brings no advantage other than convenience and it also brings some disadvantages like inefficiency and price. This is the essence of the change in the economic model of media. Post that on your wall and stare at it.

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  • Right. What will matter increasingly is the ability of web sites to deliver relatively pure audiences of good sales prospects to specific advertisers. When that happens, online ads will be a lot more efficient (fewer wasted impressions) and a lot more effective (more finely tailored messages) than mass media ads ever were. In other words, the Internet promises superior value to advertisers. “Segmentation” will be the new “traffic.” (Steve Boriss, The Future of News)

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  • I agree with Jeff that size is actually not that important. What matters is that you offer your users something this is really compelling and preferably unique. This will cause users to visit your site, and visit your site over your competitors’ sites.

    I think the problem that AOL, Yahoo, MSN have is that they simply don’t have unique and compelling content any more. Remind me: why should I actually go to AOL? What is there that I can’t find somewhere else? What is so special and unique about it? Why should I make it my ‘portal’ to the Internet?

    The problem of the larger sites is that their content is becoming increasingly commoditized and that specialized sites offer better, more relevant content. This means that the larger sites’ content is becoming both less compelling and less unique and this is contributing to their ‘decline’.

  • I couldn’t agree more! I actually better prefer the Google approach (let’s add on step by step new services = new ad space, outside of the old portal-frame).

    On an advertising perspective, I thing big on the Internet will mean more and more being able to aggregate the excellence of the niches, like Adify for instance is doing.

    But hey, AOL is going to launch its portal in Italy too (we didn’t miss it to be sincere…) and its inventory will be sold by AdLink and not!?

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  • It’s not that big is past – but rather that there’s a new definition of big. I agree that impressions and placement are what matter in an online ad buy. Maximizing each buy is important – making sure that every ad appears in front of a relevant audience, next to high quality content. An efficient, targeted vertical network buy is the most efficient way to aggregate a relevant audience, especially since the days where Web users stayed on the five major portals are past us (thank you Paolo).

    Adapting to Web fragmentation now requires traditional media companies to have a strategy to reach the long tail audience. Brand advertisers will continue to demand the control of a direct buy and it’s up to media companies or the entrepreneurs creating next generation media companies to meet that growing demand from brand advertisers through innovative aggregation strategies.

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