The Short Tail of Advertising

Do you publish for love or money? You can do both successfully if you run ads on your blog. However, selling ad space on your own is hard work. Ad networks like BlogHer, Federated Media,FeedBurner, B5 and BlogAds have done a great job to rush in to fill the void, but the shifting landscape will require them to adapt. I believe they all can.

The reason they need to change is that online advertising is clearly consolidating with the portals. eMarketer has a great round-up on the state of the biz. Some 55% of all ad revenues now flow to one or more of the major portals. Their share was growing even before Google bought Doubleclick. A separate article on WSJ.com notes that newspapers saw their online advertising dip. Again, the portals are a factor here.

So where does that leave the Long Tail? Bloggers, podcasters and social networks serve niche markets. This makes them relatively cost effective and attractive to advertisers. However, managing a media buy across a constellation of small sites is a big job. And while there are networks are doing a nice job aggregating these sites, it's still far easier to just consolidate all your ads through one or more of the big portals.

Blog ad networks would be wise to find a way to partner with one or more of these players. For a viable model, look to the PC industry. Even though the hardware and software markets consolidated there are a lots of value added resellers thriving. That's because they provided services on top of the technologies that were built by big iron vendors like Sun, Oracle, SAP And Microsoft. A similar model could prevail in a world where the portals are the Web OS.