These three pictures tell the full story.
YESTERDAY
TODAY
TOMORROW
And the edeigo blog is right:
Some of the consequences of this trend are profound.
Here are our top 10 things to watch as de-portalization continues…
1. The revenue growth that has characterized the Internet since 1994 will continue. But more and more of the revenue will be made in the foothills, not the mountains.
2. If the major destination sites want to participate in it they will need to find a way to be involved in the traffic that inhabits the foothills.
3. Widgets are a symptom of this need to embed yourself in the distributed traffic of the foothills.
4. Portals that try to widgetize the foothills will do less well than those who truly embrace distributed content, but better than those who ignore the trends.
5. Every pair of eyeballs in the foothills will have many competing advertisers looking to connect with them. Publishers will benefit from this.
6. Because of this competition the dollar value of the traffic that is in the foothills will be (already is) vastly more than a generic ad platform like Google Adsense or Yahoo’s Panama can realize. Techcrunch ($180,000 last month according to the SF Chronicle) is an example of how much more money a publisher who sells advertising and listings to target advertisers can make than when in the hands of an advertiser focused middleman like Google.
7. Publisher driven revenue models will increasingly replace middlemen. There will be no successful advertiser driven models in the foothills, only publisher centric models. Successful platform vendors will put the publisher at the center of the world in a sellers market for eyeballs. There will be more publishers able to make $180,000 a month.
8. Portals will need to evolve into platform companies in order to participate in a huge growth of Internet revenues. Service to publishers will be a huge part of this. Otherwise they will end up like Infospace, or maybe Infoseek. Relics of the past.
9. Search however will become more important as content becomes more distributed. Yet it will command less and less a proportion of the growing Internet traffic.
10. Smart companies will (a) help content find traffic by enabling its distribution. (b) help users find content that is widely dispersed by providing great search. (c) help the publishers in the rising foothills maximize the value of their publications.
What´s your opinion Christian?
By Christian Oliver - Dec 14, 2006 | Leave a reply
I agree with everything. This is another way to put many things we’ve been saying for a while. It’s a combination of media fragmentation and the long tail economy metaphors. I think Google has been very smart in that they have become a true enabler. For publishers, companies like Google can become great allies because they provide technologies which allow publishers to concentrate on what they do best. Is Google the next Donelly?
As a consequence of Fragmentation we have the increased importance of the “foothill”, which we’ve referred to for a while as niche content publishers. Technorati is a perfect example of a niche publisher.
They key for traditional media companies is to be more connected than ever to their audiences and have a very fluid understanding of their preferences. In other words, know which kind of foothill your audience wants (several actually) and cater to it.
In marketing terms, this is equivalent to segmenting your audience more and more.
Marketing, in its complete sense (not just advertising), is crucial for the success of any publisher.
Other industries have known about this for decades but media has really not been used to it. That is why Procter & Gamble doesn’t just sell one shampoo. One size does not fit all.