• by February 23, 2001

Internet media networks, or portals, need to abandon direct marketing and banner advertisements and embrace brand building through sponsorships, new service offerings and co-branded ventures, consulting firm Booz-Allen & Hamilton said in a report released Thursday.

The report said consumers are using Internet media networks as destinations rather than as gateways to other sites.

While the Internet media networks remain enormously popular with 60 percent of Web user sessions including a visit to them, portals need to adopt new business models to remain viable.

Users also spend three times more time, an average of 4.5 hours, at Internet media networks than they spend at shopping or entertainment sites.

The best way for marketers to capture "eyeballs" is to treat Internet media networks as brand development venues, paying them for the total numbers of impressions, or images, they deliver, the consulting firm said in the report.

Companies should consider sponsorships, attaching their names and messages to appropriate parts of a portal site or creating altogether new sections.

However, many Internet media networks still cling to an outdated revenue model that relies on ad payments based in part on click-through rates, the report said.

"Marketers must start thinking of portals in the same way they think of mass-circulation magazines and television networks -- as major centers of commerce and content that draw huge audiences," said study co-author and Booz-Allen & Hamilton VP Horacio Rozanski.