Rise of the network, fall of the portal

Mark today in the history of media. In today’s NY Times, we hear an ad guy praising networks over portals (and by portal, we don’t just mean Yahoo, we mean any closed media property, including TV networks and newspaper sites). Networks used to have cooties; they were supposed to be nothing but aftermarkets for unsold inventory — or so the big media properties wanted us and media planners to believe. But networks are quickly becoming more targeted, more efficient, and more economical. From the Times:

Some of the ad dollars that in the past had been spent at portals are being spread around instead. Ad networks, which fan out ads to thousands of sites, are adding targeting and are signing up reputable sites, making them more attractive for advertisers.

“There was a time when we would go out and buy inventory on the portals,” said Quentin George, global head of digital media and strategic innovation at Universal McCann, which plans media for clients like L’Oreal and Sony. “Portals make it easier for us to buy and place media on behalf of our clients. But as time continues and as analytics capabilities increase, you find that your media dollars can work better elsewhere across a range of different sites.”

Michael Hayes, senior vice president and managing director for Initiative Interactive, which handles digital spending for clients like Home Depot and Bayer, said that advertisers might be turning away from broad buys and looking for more targeted campaigns on smaller sites.

“This is hurting the portals,” he said. “There are more options.”

This is why I say that the Glam model — whether that includes Glam itself or not only time will tell — is a key business model for the future of media. Welcome to the post-scarcity post-media economy.

  • Interesting points Jeff. No doubt the broad based portals with very high traffic are seeing a softening in price terms etc. As online continues to evolve we have started to move away from TV type numbers to laser like targeting, on sites that serve a category very well, offering deeper levels of engagement etc. Smart media companies ( caveat I work at IDG) like IDG through its IDG Technetwork offering have added in another layer of targeting by creating ad networks of smaller even more niche sites that can complement the core publisher offering and offer greater reach and engagement to highly targeted audiences. I am also a big fan of the Glam Network model.

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  • There is an opportunity here…
    Networks decide which ads to display by combining knowledge of context (which site) with analysis of the content (what words, etc.). “Portal sales” focus only context.
    Today, any particular writer’s content may appear in many contexts — with or without authorization. In the old portal based ad economy, the writer would typically be directly compensated only for display in a “home” context. Now, imagine that the ad network could not only analyze the words that appear in the content but also determine authorship. This would give us a situation where content written by someone like Jeff Jarvis could be recognized by the ad network in any context. Appropriate ads would be selected based, in part, on authorship. The result is that Jarvis could be compensated with ad revenue independently of display context. (Note: Many mechanisms for establishing authorship are “obvious to one skilled in the art… They include: Explicit claims, fingerprints, signatures, etc.)

    The ability to compensate writers no matter in what context their content appears will make it easier to build the “newspapers” of the future that are pure journalism and editing shops. Such shops would produce content for syndication while not relying on their own websites as the sole source of revenue.

    bob wyman

  • Damn, Bob, I love your comments.

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