Commentary

Bottom Feeders or Advertising Revolution, Part II - Readers React

Last week's column, "Bottom Feeders or Advertising Revolution," examined the growing phenomenon of the ad network - dozens of interesting enterprises who buy remnant inventory and then aggregate/maximize it for marketers, making a profit on the arbitrage between the cost of inventory (often CPM) and the price to the marketers (often CPA). This makes for a nice business - Advertising.com and others are bringing in more than $100 million doing so.

But, I wondered, could it be much bigger? There are millions - billions really - of potential advertising inventory on smaller sites that cannot afford an ad sales force, or are not large enough to get the attention of most marketers. Smaller, by the way, does not mean a few hundred.

There are countless sites, blogs, and communities that attract literally hundreds of thousands of viewers, often with specific interests. They find those audiences, serve them, and then aggregate them; one day a company could be a network with quality ad inventory competitive with any traditional publishing site or even portal. Think Google ad-sense, but for banners, boxes, and other branding products.

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As this piece spawned dozens of e-mails, I thought I'd share a few here.

There were many fans of Ad Sense. One webmaster of a niche auto site captured the view of many: "I have a friend with a very small traffic-wise niche site who claims he is getting a 10 percent click-through rate and $100 CPMs from AD Sense... The numbers sound reasonable to me. The site is not his "day job." Google has been making my mortgage payment every month for over a year now, all on a site I designed in 1998 just to "do" a Web site. You may not think it is a quality site but my visitors like it and I have never spent any money on online advertising to get traffic for it. Haven't had to do that. The visitors are ultimately the people who matter."

The CEO of one very popular ad network wrote that all the focus on "remnant" and "bottom feeder" language, belittles the point that even smaller, niche sites are passionate about quality. "First, I'd suggest that you overlook what most publishers think of themselves: they are passionate and serious about what they do, and typically, ferociously independent - in a classic, journalistic kind of way. This has important strategic consequences. For one, it is not necessarily true that publishers, big or small, have "happily engaged with" network/remnant ad sales companies. [At this company], we host a discussion forum for our 1,800 Web publishers and there has been very little joy expressed inside that forum over the years for cheap ad impressions and the quality of advertising we generally associate with bottom-feeding. They want better for themselves and their audiences."

Others add that networks will offer a significant opportunity for quality advertising products beyond text words: "Personally, I think the brand advertising future for thousands of niche publishers online is a bright one. After all, that's where the people are. Case in point, the recent comScore Media Metrix and DoubleClick Internet Audience Dynamics study (9/04) which revealed that building net reach online will require moving beyond the large, general interest sites and portals in order to reach users in high composition environments (niche)."

The publisher of one of the leading collections of blog and other content/community sites thinks there is benefit in aggregating such inventory by niche or demographic: "I think there's also an opportunity for focused networks. One specializing in the 18 to 24 audience, for instance, or moviegoers, like Gorilla."

One of the leading political journalists from the West Coast wrote me that he thinks the potential for a lesser known candidate to affordably find audiences through these networks could be significant: "Suppose that the next Howard Dean -- say a more photogenic version who doesn't scream and hails from a big state -- was able to start an early campaign and aggregate some of these networks. He (or she) could make himself competitive in a hurry."

And, finally, a top online Web executive sent me the headline that BlueLithium, who serves more than 4 billion ad impressions each month over a network of 1,000 Web sites, just acquired the ad-server AdRevolver. His only comment: "how MANY of these guys are there????"

If someone can find me an estimate of the available inventory - or even potential inventory - of smaller niche sites, I'd greatly appreciate it. There is a revolution here.

CORRECTION: In this previous piece, I noted that blogs like Wonkette, are getting better than $10,000 a month from advertising networks. While independent publishers certainly have had success like this (or more), Wonkette and Gawker Media have never released any specific numbers.

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