Big Four Portals Grab Bulk Of Ad Dollars

Despite an increasingly fragmented online universe, big-name portals are alive and thriving, according to eMarketer's new report, "Portal Marketing: The Big Four." Indeed, in 2007, eMarketer projects Google, Yahoo, AOL and MSN will sop up a whopping two-thirds--66%--of the $19.5 billion spent on online advertising.

"Traditional marketers tend to find safety in established, mass-market brands," the report holds. "And since advertisers put only 6.6% of their ad budgets online in 2006, the need for established Internet brands will remain strong for several years."

This year, Google accounts for a full 32.1% of all online ad spending, while Yahoo will come in a distant second with 18.7%. AOL--which only last year switched from a subscription model to an ad-supported one--will take 9.1% of all online ad revenue, according to eMarketer, while MSN is expected to trail with 6.8%.

"Even though that mass-market approach cannot appeal to everyone, let's acknowledge its meat-and-potatoes place on the Web," says David Hallerman, senior analyst and author of the "Big Four" report. "While portals may not be cool, they often nourish."



The portals' control over online ad dollars has only increased year over year. In 2005, the four captured more than half--53.7%--of that year's Internet ad spending: $12.5 billion.

Why are portals still so popular with advertisers?

"The short answer is tons of traffic," eMarketer claims, since each of the four averages 100 million or more unique visitors monthly. That translates into 57.4% of ad revenue in 2006 alone. "The massive scale and something-for-everyone kind of experience offered by portals will continue to attract a certain type of advertiser and consumer," adds Hallerman.

eMarketer's findings are supported by a 2007 Digital Outlook Report just released by Avenue A|Razorfish, which found the major portals had seen a healthy rise in the percentage of overall media billings, from 13% in 2005 to 24% in 2006.

The Outlook Report also notes a trend toward higher-impact, higher-cost ads, with CPMs up 18.8% over 2005 prices. For now, that reality will only benefit established portals; less-structured sites, like MySpace, continue to struggle with content quality-control issues.

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