• by Mark Walsh  @markfwal, November 7, 2008

In making the case for vertical ad networks at the OMMA AdNets conference in New York Thursday, Glam Media CEO Samir Arora highlighted the "media paradox of the Internet" to explain the logic behind grouping affinity Web sites for the benefit of publishers and advertisers.

Arora suggested in his keynote address that the Internet is the only medium where there's no control over distribution, turning the hit-driven mentality of traditional media like radio and television on its head. He cited figures showing that even a major online portal such as Yahoo--with 74% reach among Web users--commands only 7% of overall Internet usage.

By comparison, "If you look at the top three networks on TV, you'll find they command a large percentage of usage," he said. "The controversy stems from the fact that people don't accept that media has changed."

Arora argued the Internet has emerged as the most influential medium, even if still not viewed as the most "authoritative" compared to traditional outlets. That's mainly because the Web has become the medium of choice for teens and young adults, who spend more time online than watching TV.

How do marketers reach those key audience segments and others scattered ever more widely across the Web? Enter vertical networks such as Glam, composed of more than 700 women-oriented sites. By aggregating scores of sites within specific categories, they combine audience reach within targeted categories.

"When you bring together sites in that group, suddenly it becomes the largest group," he said. That strategy helped Glam in little more than a year become the top online women's property, with a monthly U.S. audience of 52 million, according to comScore. It ranks as the tenth-largest U.S. Web property overall.

Glam's rapid rise also sparked a bitter controversy with women's network iVillage, which disputed its comScore ranking because Glam is made up of a network of third-party sites rather than being a single property like iVillage or Yahoo.

Arora likened Glam's model to that of a TV network that has local broadcast affiliates as well as operating its own stations. "This is no different than TV affiliates versus owned-and-operated stations," he said. A network's TV ratings will reflect the overall audience across both types of stations.

Building up a large audience quickly by stitching together hundreds of similar sites, however, still raises questions about maintaining a uniform quality of content. To that end, Arora said the company carefully vets each publisher added to the network, and has editors to help curate and monitor content across its sites to insure a consistency of quality.

The impetus is building trust with brands that need to feel comfortable advertising within particular sites or across Glam's entire network. "Brands trust us because of our reports and accountability over time," said Arora. Glam has attracted more than 300 brand advertisers including Victoria's Secret, Reebok and Paramount.

Confident that it can duplicate its success with a male audience, the company last month launched Brash.com, catering to men 18 to 49.

A later panel billed as a "smackdown" between horizontal and vertical ad networks suggested that media buyers are not necessarily choosing one at the expense of the other.

Jocelyn Griffing, senior vice president for online media at Icon International, said the agency has smaller-budget clients looking for the "tonnage" in impressions that horizontal networks can deliver, while higher-end marketers want more targeted buys in vertical categories. And some clients want both. "It really depends on who you're trying to reach and what the criteria is for success," she said.

While Icon is focusing increasingly on the vertical side, "dollar for dollar, we probably spent more with (AOL's) Platform-A than verticals," she said. That was welcome news to panelist James Fellows, vice president of product management for Platform A. But with advertisers feeling the pinch of a recessionary economy, he said marketers are turning increasingly to performance-related buys that emphasize accountability and return on investment.

"The message we're hearing is, 'we are going to focus,'" Fellows said.