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Summary:

In 2006, portals experienced a rebirth, with ad spending for that segment leaping to 24 percent from 13 percent, according to figures contai…

In 2006, portals experienced a rebirth, with ad spending for that segment leaping to 24 percent from 13 percent, according to figures contained in Avenue A/Razorfish’s 2007 Digital Outlook Report.
AA-RF’s 2006 online media billings totaled $542 million, which was spread across 863 sites, an increase of 30 percent compared to 2005 and 74 percent over 2004’s spending.
While noting that sites like MSN, Yahoo and AOL experienced harsh criticism at some point during the year, portals as a billings category gained a substantial piece of the online media billings pie. That category’s share increase still places it behind verticals, which captured 37 percent of ad spending, and search, which got a 28 percent slice, down from 2005’s 31 percent. The ad network category was the smallest, as its collective share of billings dipped to 11 percent from 12 percent the year before.
The 75-page report’s big news is centered on AOL. With a graph highlighting the Time Warner company’s decision to move to a free, ad-supported model on Aug. 6, AOL went from dying a slow death to robust ascendancy, surging 454 percent in 2006. Putting AOL’s rise into perspective, AA-RF notes that the portal category overall rose 142 percent.
Taking a deeper look into the vertical category, billings in the business and finance area, which made up 4 percent of that category, gained 81 percent in 2006. Community and entertainment each made up 17 percent of billings within vertical

  1. This seems like a real vindication of Jon Miller's strategic repositioning of AOL in 2005/early 2006

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  2. Will Social Networks and Vertical Search combine to challenge Google?

    Google’s major strength – the clean search box and the ease of use, commoditised ad revenues, perhaps masks its principal weakness. As media content and advertising revenues fragment to serve thousands and thousands of “vertical” online communities based on lifestyle or profession, Google may suddenly seem standardised, commoditised and lacking a sense of unique community. Is Google becoming Wal-Mart, while vertical communities may prefer Harrods?

    Whilst “horizontal” media companies are similar to supermarkets, specialist professional “vertical” publishers are very specific in serving niche communities with totally relevant content and requirements. However, the publisher’s principal operating difficulty in becoming adaptive to this asymmetric Web 2.0 opportunity is that most tend to run each of their print, exhibition and online titles/businesses as separate profit and loss items on their balance sheet. As a by-product the vast majority tend not to have a centralised IT infrastructure or the human IT skill sets to manage a large scale data centre or web spidering facility – the prerequisites needed to datamine and aggregate open source, user generated and blog content to create vertical slices of the Web that are relevant for their audiences. In addition, the datamining, crawling and hosting to identify relevant open source content will also need to be a continual process due to the continual growth of this content.

    Convera have two large data centres, an extensive web spidering capability and a web index. Convera are now partnering with a significant number of specialist B2B publishers to create a range of vertical websites for specific professional communities. The first example of this is Searchmedica.com with UBM.

    In building the deep vertical search portals, the key is to reach into the specific professional community in a number of ways. First, you can combined the trade publisher’s knowledge and contacts in the profession with community appeals that engage the specific audience in a way that general search cannot, and also by taking special care to use the taxonomies common to the targeted profession in organizing search results so that the user feels more at home and among peers. Building a good vertical engine can be costly and time consuming, and getting a critical mass of users to de-Google their search habits into more specialized engines is potentially a tough sell. However, in tests with focus groups from different professional communities to test these vertical search properties against Google, the results are hugely encouraging.

    In building the beta test sites, the specialist publishers are providing Convera with “white lists” of data sources online and websites that would be most relevant to its readers so that the searches are restricted to reliable and trusted information. Publishers are also securing agreements with owners of key proprietary content not normally crawled by Google by leveraging some of its contacts and resources so that Convera can crawl and deliver some of their proprietary content.

    Another key consideration is getting the user community engaged in the process as co-developers. A number of publishers are actively assessing the potential of adding social networking to the mix in order to get professionals interacting with each other and adding weekly podcasts by industry experts on issues affecting the community – these additional services will create more community loyalty and also additional advertising and sponsorship opportunities.

    The publishers can also use their print titles to drive the audience to the new online areas and this will also assist the transition of their high value print ad revenues to online. Publishers also have exhibitions, seminars, events and email newsletters to assist this transition – and recent research suggests that professional communities will actively attend seminars and events to meet peers and other members
    of their community.

    Google does not allow you to have a beer with a potential business partner – it doesn’t have that sense of community.

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  3. Although I agree with you in principle, I still find Google the best out there.

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