The Big Four Get Bigger

Certain industry pundits have written recently on the "de-portalization of the Internet" and the "death of the portal." But a quick look at the numbers show that their premonitions are premature.

eMarketer estimates that net US ad revenues at Yahoo!, AOL, MSN and Google represented 57.4% of the total Internet ad spend in 2006.

And the portal slice of the ad spending pie is growing, not diminishing. This year, ad spending at the four major portal sites will account for fully two-thirds of total online ad revenues.

"As traditional marketers move more money online, they look for safety in established, mass-market brands, and portals are that," says David Hallerman, eMarketer senior analyst and the author of the new Portal Marketing: The Big Four report. "Other than Google, the large portals are at least 10 years old, and all four average 100 million or more unique visitors monthly."

According to eMarketer estimates, the top portals will all increase US net ad revenues in 2007, with nearly $13 billion going to just those four sites. And the revenue rankings will remain the same as in 2006.

"When you view ad revenues by growth rates, however, another pattern emerges," says Mr. Hallerman. "The annual increases at Google, for example, are getting smaller each year — but are still far above any other portal."

At AOL and MSN, on the other hand, ad revenue growth is ascending each year, with spectacular 36%-plus gains at AOL. In that light, the portal's revamped structure (switching from a subscriber to an advertiser model) appears to be working out.

Revenue growth at Yahoo! remains flat, though, with approximate 20% gains in 2006 and 2007. That is due to the ongoing problems the portal has with paid search revenues, which are not performing as well as the display ads on the other pages.

"Industry prognostications aside, the idea of a portal is not going away," says Mr. Hallerman. "A something-for-everyone kind of experience will continue to attract a certain type of advertiser and consumer. Even though that mass-market approach cannot appeal to everyone, let's acknowledge its meat-and-potatoes place on the Web."

In other words, while portals may not be cool, they often nourish, and so — at least in the near future — they will continue to flourish.

To understand where the majority of online ad dollars are going, and why, read eMarketer's new Portal Marketing: The Big Four report. 

news source:www.emarketer.com