• by Mark Naples , April 8, 2005

David Berkowitz did such a great job in his Search Insider this past Tuesday, titled "The Many Faces of Local."

As David pointed out right off, InterActive Corp's (IAC's) focus on properties that can target users locally could make Ask.com into the leader in local search media on the quick, while making IAC into a company to watch in local for all of interactive. I'll add to that statement that it will depend on how they educate local advertisers to leverage these combined assets in ways that the advertisers can understand. These are some major sites in their stable - all with local value propositions for marketers: Citysearch, Entertainment Publications, Expedia, Hotels.com, HSN, Match.com, RealEstate.com, and TicketMaster.

Of course, with only major national brands dipping their toes into local search these days, the local value proposition for such a combined entity may be years out. But, if it's less than two years out, Barry Diller will look like he knew more than everyone else... again.

Knowing more than everyone else would be cool, I guess. But, something we financial mortals can focus on in interactive is educating the less initiated on just how robust the larger Web is beginning to look.

The reason that the IAC deal has this upside is because its individual sites - those listed above and others - can leverage buys across their brands and create a combined media asset to offer marketers. This is what some of the ad networks tried to do back in the go-go 1990s, of course. Sometimes, good ideas become better ideas over time.

Look at the success of some of the networks that are driving great results for clients these days - leveraging media properties that are decidedly NOT the big three.

Although I just wrote that my focus was not going to be on the big three, it's impossible to write this without mentioning how smart AOL's purchase of Advertising.com looks in this context. Obviously, the folks at Dulles and in the swanky new Time Warner building see this. The ability to target ads across the whole Web with as much reach as it provides - and not just through a few properties - and to target these ads locally, is a winners' game for some of the same reasons that it cost venture capitalists so much money in 2000.

"Advertisers are telling us that our reach is what makes the difference for them," said Robert Formentin, vice president of advertiser sales for Advertising.com. "Web surfers' varied interests have them visiting many sites outside of big three. Our ability to reach them there is key to our success."

The Burst Network is another network that supports these assertions. Booked business in 2005 for Burst's 2,000 Web site ad network is up 200 percent year over year.

For 2004, Burst's ad sales were up 67 percent ahead of 2003, which is impressive enough. But, what they've done with branding campaigns - which now comprise two-thirds of its revenue - is what catches the eye. Two thirds of revenue on a huge ad network coming from a non-direct response source? Could it be? This must be great news for Burst's bottom line.

Blending such reach with a multi-tactical tool set used to imply having every different interactive tactic to offer consumers. Back then, it may have been e-mail, network buys, and individual site buys - mostly. Today, it could be those tactics blended in harmony on one buy, with a search component too. That's what Diller seems to envision.

Even if all it implies is a network buy, these days that buy can be CPM or performance-based, and made on a network that can optimize delivery on the fly and generate clean reports for decision makers. As anyone who worked in interactive in 1999 knows, this was not the case very often in the day. Confidence was not part of the buying exercise.

While comScore Media Metrix reported the Internet grew 5.7 percent in number of total unique viewers in the year beginning November 2003 through November 2004, Burst claims growth in unique viewers on their network was 16.1 percent for that same time period. Other networks of less well-branded sites have reported similar growth.

Our Web media universe is growing and becoming more mature. Individual sites are getting better and networks' ability to reach users is making some of these sites more money, which should continue their improvement. It's still the first inning, but the game is getting so interesting that some of the real giants of the industry are betting big money on this trend continuing.

Is this sort of fragmentation a good thing? Is it just a cyclical trend, and maybe due for contraction? What do you think?