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64% of Online Ad Dollars Go to Five Companies

Marketshare award still goes to Google. Most improved player: Facebook.

More at the Business Insider.

Marketshare: US Online Display Ad Spending

From Wall Street Journal’s article AOL Growth Comes At A Cost, which says “[AOL] isn’t earning enough money selling ads on those sites to cover its costs for a profitable business, analysts say.”

Will Demand Media and Other Content Farms Ever Create Good Content?

I loved this tweet by NPR senior strategist Andy Carvin on journalism versus newspapers. One is a specific type of content, he reminds us, the other is a distribution platform.

Andy Carvin Tweet on Newspapers v Journalism

In the early days of Internet newspapers and magazines, which banged out new content more frequently than their print counterparts, web publishers were criticized for their lack of quality, spelling and fact checking.

Right around the time web publishing had attained mainstream credibility, blogs emerged as the new enemies of quality journalism. How could people writing without pay create anything good? But somehow quality publications emerged from the blogosphere, including the Huffington Post, with its small staff of editors and its thousands of unpaid contributors.

Evidence of the Huffington Post’s legitimacy among journalists is a recent post at the Daily Beast by Newsweek’s Dan Lyons. Its new model of journalism — some created by paid staffers, some for free by independent bloggers, and some aggregated from other sources such as AP — is in danger of destruction by the “AOL Way,” an approach advocated by AOL CEO Tim Armstrong to create more search-engine friendly content. Much like the technique used at content farms such as Demand Media and Yahoo’s Associated Content.

“It’s all about making stories based on traffic potential and profit potential. It’s all about numbers — and volume. It’s a depressing, sickening, embarrassing document. AOL’s hacks are expected to write five to 10 articles a day — which put me in mind of the scene in Ben-Hur where the slaves are put to work rowing a Roman warship, and their Roman master tells them, ‘We keep you alive to serve this ship. So row well, and live.’”

Before I go on, let me first admit that Demand Media and Associated Content are certainly producing a lot of crap. Earlier today I was searching to find caffeine levels in Mighty Leaf brand breakfast tea (is there any?! I’m falling asleep as I type this), and on the first page of Google’s results was an “article” from Associated Content.

Associated Content on Might Leaf Tea

It’s really atrocious. Someone or some machine seems to be inserting phrases such as “your search for excellent quality teas” and “great online source for tea drinkers” in nearly every sentence. And there’s almost nothing useful between the search-bait clauses.

Yet I still hold out hope for the content farmers. In its extreme form, where somebody or something is generating and inserting nonsense phrases in sentences written, presumably, by a human being, these content-farming platforms are spewing out spam. If Google can’t figure out how to sift out this dreck, it will (as has been widely reported) lose its share of our attention and the ad dollars chasing that attention.

But what’s to say that content farms can’t operate like quality-agnostic platforms — like Blogger, WordPress and Twitter? Or “platforms” that are less defined by their underlying technology than by their ability to delivery content to audiences, such as the Huffington Post or print newspapers of old? If you turn off the god-awful search-bait phrase creator, isn’t content farming just a new way of assigning stories? We’re certainly in trouble as a civilization if this becomes the only way! And you’ll still have lots of junk — just like you do across the blogosphere, Twitter or those beloved newspapers from the golden age of print journalism — but there’s also an opportunity for a passionate tea drinker to publish a useful paragraph comparing breakfast blends from Mighty Tea and Peet’s, or a community organizer to get news out to neighbors without the costs associated with publishing a neighborhood paper.

Who knows? When I first created a Twitter account, I dismissed it as a chat room for my narcissistic friends. Now it’s helping to power revolutions.

Related: As Google Declares War on Content Farms, What’s Demand Media To Do?

Will Bigger Ads Be Better Ads?

AOL’s Devil Ads, according to the above promo video, offer advertisers more space on the page, more rich media and interactive functionality, and no competition from other ads on the page. Hmm. They are definitely bigger, I’ll give em that. I like the interactive capabilities (though those aren’t exactly new). I like reduced ad clutter — a welcome development for website visitors and advertisers alike. But it all sounds a bit like CNET’s Messaging Plus Unit (MPU), which debuted in 2001.

So that leaves us with… bigger. At a moment in time when consumers feel overwhelmed by interruptive advertising, when they use technology to block ads and ignore those they can’t, shouldn’t we be striving for something better than just bigger?

Bigger seems like a cop out, an easy answer that lacks creativity on the part of buyers and sellers of advertising. A better idea? Don’t focus on the size of the ad, focus on the experience inside it. As Google, of all people, is suggesting to brand advertisers: Make advertising so good that customers will subscribe to it and share it with friends.

eMarketer Lowers Forecast for Online Ads, Especially For Those That Aren't Effective

Hey, it’s my site and I’m allowed to write snarky headlines.

Officially the news is this, as reported by Bloomberg: eMarketer plans to cut its 2008 and 2009 year-over-year growth forecasts for online advertising by a few more points, which currently stand at 23% and 16%, respectively.

“Google Chief Executive Officer Eric Schmidt said for the first time last month that the company, the biggest seller of online ads, faces a more challenging economic environment. Google’s ads tied to Internet search results are still faring better than much of the graphical banner ads sold by companies such as Yahoo and Microsoft.”

I have no doubt that the online advertising market, across the board, will feel the pain of the broader recession. I also agree that Yahoo, Microsoft and AOL will feel greater pain than Google. But it’s not because Yahoo, Microsoft and AOL — which sell mostly graphical banners instead of text ads — are used by advertisers for online brand-building, and brand advertising suffers more on economic downturns.

While the second part of that sentence is true, the first part isn’t. Most marketers buy low cost graphical banners on Yahoo, Microsoft and AOL for the same reason they buy text ads from Google, to drive clicks and other DR activities. Because they are less efficient DR vehicles than Google, they’ll be cut from plans first. The online publishers that have spent recent years working with advertisers on relevant, high-value, integrated sponsorships (rather than chasing Google) are going to fare better — in relative terms — than those three portals.

AOL Shutters Tacoda, and Other Ad-Network Bad News

Last year AOL paid $275 million to buy Tacoda. Now, according to Venture Beat, AOL is dropping the brand and rolling the technology into Platform A’s unit.

“iThis is a shocking move for some, because doesn’t target much at all, and offers ads of $1 or less per a thousand views — and is generally considered a ‘bottom-feeder’ by some in the industry.”

Times are tough at ValueClick, too

JP Morgan: Portals Losing Share Fast

Another powerful data point from JPMorgan’s Nothing But Net report:

“While portals were once dominant, Yahoo!, AOL, and Microsoft only accounted for ~29% of minutes spent online in August 2007, down from 42% in August 2002. Meanwhile, blogs, online gaming, and social networking websites have experienced double to triple digit Y/Y growth rates in page views. This fragmented audience not only makes it more difficult for advertisers to reach their target audience through only a few publishers, but also makes it difficult for publishers to attract advertisers given their limited scale. We believe that companies that can aggregate traffic through the development of ad networks or partnerships will be more successful in driving growth in 2008.”

Anti-Gay Presidential Candidate's Ads on

According to Nielsen (see NY Times), banner ads for Mitt Romney’s presidential candidate ran 515,000 times on AOL’s, the ad network that accidentally put ads for the anti-gay candidate on the pro-gay (and anti-Romney) site, says the number of impressions was only 32,000.

Romney’s ads also ran alongside pornographic scenes of Harry Potter and Hermione Granger on fiction site McCain ads ran on liberal-leaning Huffington Post, Guliani ads ran on progressive DailyKos, Obama ads ran on Amazon alongside a book deemed by Jewish groups to be anti-Semitic.

“Part of the issue seems to be that political strategists came into the campaign season unschooled in the challenges of Internet advertising, and Web advertising sales outlets are not necessarily aware of the unique sensitivities of each presidential campaign.”

I believe the first part — political strategists may not know how online ad networks work. But the second? Oh come on. The problem isn’t that the people at “Web advertising sales outlets” like aren’t politically savvy enough to understand the “unique sensitives” of their advertisers. It’s that they don’t have those people on staff; the ads are targeted and served by computer algorithms that don’t know how to worry about sensitivities.