NEW YORK (AdAge.com) -- When it comes to where online ad dollars are going, Razorfish's annual digital-outlook report is always an interesting glimpse into one agency's decisions. And as Razorfish is the second-largest agency by digital revenue, according to Ad Age DataCenter data, it's worth paying attention.
So where did the money go? In 2008 the portal category, which includes sites such as Yahoo and MSN, nabbed a smaller share of Razorfish's dollars, 16% vs. 19% in 2007. The reason, Razorfish said, was that while the scale portals deliver still matters, the choices for obtaining targeted scale outside of portals have grown. Think about targeting women at NBC Universal or Meredith sites or buying men at scale from a property such as ESPN.
"We don't need portals to achieve scale," said Sarah Baehr, national media lead at Razorfish.
The report doesn't specify the exact amounts spent on various properties, only the share of spending. That means while a drop in share is interesting directionally, it doesn't necessarily translate into a drop in real dollars spent.
While broad reach is attractive, it couldn't save vertical sites, which include the ESPNs and Merediths of the world, from dropping as well, down to 35% of Razorfish's ad outlay from 39%. Of course, if those sites hadn't been able to steal from portals, the drop may have been more precipitous. Search was the real bright spot, up to 37% of spending in 2008 from 31% in 2007. Ad networks also grew share slightly, to 12% from 11%, also taking a bit of portal money.
There were a few surprises when digging into the various verticals where Razorfish spent its dollars. Spending on community sites, which include social networks such as Facebook and MySpace, actually went down to 16%, from 19% the year before.
Why, despite so much buzz around these sites, did spending decline?
"We're looking at social not so much as social media but as social-influence marketing," said Terri Walter, VP-global emerging media. The question becomes how a brand can have a presence within social environments -- and that doesn't always include paid media. Also, social networks were new in 2007, and many clients were jumping in, Ms. Walter said, with more dollars going toward media; today they're stepping back and looking for new ways to use the networks.
Spending on entertainment sites was way up in 2008, to 23% of share from 18%, for two reasons: First, Razorfish finds that people in leisure environments are more open to advertising and the ads appear to convert better, and second, there were many new premium video sites where advertisers could spend their dollars. Said Ms. Baehr: "Hulu didn't really exist for us in 2007."