The Gap Widens

I love to advertise on small niche sites. There’s something about an audience’s loyalty to a small, “underground” site that just can’t be found at the larger portals and high-traffic sites. There are also some fantastic deals to be had at smaller sites that depend less on ad revenue for their financial well-being.

While I work primarily on the buying side, I’ve published more than my share of small websites. Many small publishers like myself started out with a content idea that eventually achieved a significant user base with little in the way of advertising. “Pet project” websites can quickly grow out of control, with the publisher eventually forced to make some tough decisions when content, software, and hosting costs are taken into consideration.

By the time a web publisher outgrows a low-cost web host, he knows that there are significant challenges ahead with regard to getting the bills paid. At this point, the publisher considers any and all of the following options: 1) building a sales force to monetize the site’s traffic; 2) joining a network such as DoubleClick, 24/7, or ValueClick; 3) joining an affiliate network like LinkShare or BeFree.

Regardless of which options are considered, this is a big step for a site publisher. What may have started as a hobby has now turned into something serious—a potential liability. To support the continued growth of the site, the publisher has to invest more time, effort, and risk.

Unfortunately for advertisers who like to advertise on smaller websites, that risk is one that publishers are less willing to take. Even with the help of an ad network, a small website is competing with the likes of AOL and Yahoo for ad budgets. The top few dozen websites take home the vast majority of online ad dollars spent because of the clout of their sales forces, their reputations in the industry, and the unfair emphasis that online media buyers have placed on wide reach and overall traffic.

Does this mean that smaller sites are doomed to be crushed by the larger players in the market? Not necessarily. I’ve recently seen some articles about marketers like Procter & Gamble moving toward more niche sites in their media selection. Odds are this has a lot to do with the enhanced loyalty I mentioned earlier. Other marketers should be taking advantage of what smaller sites have to offer. Media planners should aim to further segment their online audiences and align those segments with their niche interests.

For instance, a planner who recommends advertising on a large travel site might look closer at his audience and find that the majority of his target audience travels for pleasure rather than for business. Instead of aiming to cover the entirety of the travel audience with a travel portal, maybe he should drill down a bit more and find three or four smaller sites that are dedicated to pleasure travel exclusively. It would fit the target better, and chances are that the planner would be able to cut a much more favorable CPM deal with the smaller site than with a large travel portal.

After all the talk in the web’s early days about technology leveling the playing field, it would be a shame to see a widening gap between large web publishers and small ones who can’t get on the radar screens of brand advertisers.

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