Ad spending moving from portals to search, entertainment sites

For online advertising, the word is that portals are out, but search, entertainment, and social network sites are in.

(Credit: Avenue A/Razorfish)

That's according to a report released on Sunday by Avenue A/Razorfish, the ad agency part of online advertising firm Aquantive, which Microsoft acquired last year.

During 2007 total online ad spending through Avenue A/Razorfish was $735 million, up 36 percent from the year before, and the number of Web sites on which ads were placed doubled to more than 1,800, according to the "2008 Digital Outlook Report."

The share spent on portals dropped from 24 percent in 2006 to 19 percent, while search share rose to 31 percent from 28 percent, vertical sites rose to 39 percent from 37 percent, and spending on ad networks was flat at 11 percent. More dollars went to the top five ad networks.

"This endorses the strategy of the portals to buy ad networks" and beef up their paid search efforts, Jeff Lanctot, senior vice president of media at Avenue A/Razorfish, said in an interview.

Microsoft's new AdCenter and Yahoo's Panama are aimed squarely at reducing Google's dominance in the paid search market. Meanwhile, the major portals also recently acquired ad networks: Microsoft's acquired DrivePM as part of its Aquantive purchase, Yahoo bought Right Media and Blue Lithium, and AOL purchased Tacoda and Quigo.

Asked about what effect a recession would have on online ad spending, Lanctot was fairly optimistic. "If there is a widespread recession, all advertisers will be impacted, but digital is more insulated than other channels" because of the accountability it offers--the ability to track its effectiveness better than other types of advertising, he said.

However, search might not be as well shielded, because even if marketers keep placing ads, searchers will be cutting back on their online shopping to try to save money, Lanctot said.

[hunter_jc]

What is Portal?

I don't understand what is Portal. Is that the Orange box game?

[JAndrewM]

Portals

A portal is like Yahoo.com, the MSN and AOL homepages - A site <br />that offers their search engine + access to other features such as <br />news, shopping, weather, sports, email, ect. Your ISP probably has <br />one as well but more localized in nature. These sites usually have a <br />"Make XXXXX Your Homepage!" button or try to sneak the action in <br />somehow in order to make sure you keep coming back.

[tonymeehan]

Online ad maturity is not about behemoths

For many years traditional media planners have had it too easy. <br />In fact so have most of the big media companies. A couple of TV <br />ads on one network, a run of print and a bit of outdoor and easy <br />cash. And this with a finger in the air to measure. <br /><br />Well for over ten years now (14 for me), we online marketers <br />have been banging our heads against the wall in trying to <br />change attitudes. Of course they have changed to a degree, but <br />too many of the big agencies and client stake holders are <br />struggling to hold on to the great traditions that have kept them <br />so well.<br /><br />Those traditions saw the big money going to the portals as the <br />answer to online brand and response. A few years later, add a <br />little search and that deals with direct response and they think <br />they have done their job.<br /><br />The truth of course, is that online marketing is far more <br />complex. With unlimited inventory and many channels, the <br />planners have to work for their money. And I haven't even <br />mentioned the change in media consumption, channels and <br />habits! The average 21 year old can consume an average 4.7 <br />media channels at any one time - the majority of them digital.<br /><br />The modern consumer demands engaging if brands or <br />companies are to be included in their world. The online sales <br />process is a journey that includes numerous channels and <br />activities before conversion. Multiple channel tracking for <br />accurate measurement and accountability exists but rarely used <br />effectively if at all.<br /><br />The affiliate channel is playing an ever increasing role.Focused <br />on results and pay for performance, it is guaranteed to continue <br />its year on year growth. Put content where the consumer is <br />consuming. Trust has shifted from brands to autonomous <br />affiliates and bloggers.<br /><br />It will take some time for the clarity and reality to bite, but bite it <br />will. I continue to see media plans which not only do not address <br />these complexities, but continue to pay token brand presence to <br />online.<br /><br />Fully integrated campaigns that combine both on and offline <br />channels, and for sure the behemoth of portals or the big media <br />companies will be largely replaced by hundreds of smaller <br />equally potent creatures in the media planners future.<br /><br />Tony Meehan