Monday, May 12, 2008

AOL eyes local online ad portal

SPECULATION is mounting that Time Warner's internet division, AOL, is set to launch its network in Australia.

Such an entry would continue the rapid-fire shake-up of the Australian internet display industry currently under way, putting the big players under more pressure to retain their dominant market share. bills itself as the biggest network of its type, serving up video, mobile, display and search advertising on independent websites using technology to target and follow individual users.
In the US, it claims to reach 90 per cent of all internet users andmodestly describes itself as the "holy grail of online advertising".
In Australia, it would compete most directly with the other international networks - such as DrivePM and Adconion - that are running performance or behavioural targeting networks here.
But the entry of would represent yet another increase in competition for the online display advertising market, which at current growth rates will be worth more than $450 million by the end of this year.
So while the major publishers in Australia - which between them have an estimated 70 to 80 per cent share of that market - are trying to establish third-party advertising networks of their own, independent website publishers will have more choice than ever about who should sell their advertising.
The big publishers' sales forces are operating at the premium end of the spectrum to tailor high-impact brand campaigns for advertisers, but the battle for the so-called "long-tail" of internet advertising -- or the thousands of niche websites with statistically irrelevant individual audiences -- will increasingly be fought along technology lines.
It will be about which of the networks can put the right ad in front of the right user at the right time, thereby getting the best response.
It can't be easy for small publishers to decide who should represent them. The network market in Australia is becoming increasingly crowded.
Affiliate advertising networks (think Viva9 and dgm) compete with third-party sales networks (such as MediaSmart, PostClick or Max Interactive) and performance or behavioural targeting networks to clip the display advertising ticket as ads are served up to users.
It's too early to say which of the big global players has the best product, but Adconion, for example, is staffing up quickly on the expectation of a big increase in local activity.
It has also appointed ex-MSN sales expert Nick Higgins (formerly of ad agency Maher & Holmes, Australian Radio Network and Channel Ten in Sydney) to lead a new global sales division targeting international advertisers.
Then there are the big publishers (such as Fairfax Digital and News Digital Media), which have a lot of inventory of their own to sell, including sought-after premium advertising spots as well as tracts of unsold or remnant advertising they are also keen to monetise on a performance basis.
Perhaps the most interesting activity is happening among the true portals - Ninemsn, Yahoo7 and, now, possibly, AOL - whose market share positions have been hardest hit by the rise of the long-tail.
Yahoo7 is building an advertising network of industry-specific (or vertical) audiences and as an incentive is offering Yahoo7 email, instant messenger and search services to publishers. It has its own suite of international targeting technologies it can roll out to manage advertising across the independent websites.
Market leader Ninemsn, through its tie-in with MSN and therefore with players such as DrivePM, has the capacity to do the same. Official comment from AOL about the expected launch of was thin on the ground late last week.
But if it does come to Australia - possibly with other elements of AOL's advertising sales arm Platform A - there would at least be a specific reason for both local advertisers and local website publishers to consider using AOL.


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