The Bulk of Web Riches Continue to Go to Few

'Big Four' to Nab Two-Thirds of all 2007 Online Ad Revenue

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NEW YORK ( -- Scale and reach continue to be important themes for online advertisers -- and that is keeping much of the online ad dollars distributed among the top four web players. Despite the consistent predictions that portals are out of vogue, their share of the total ad market continues to grow, according to multiple recent reports.
The Big Four will nab 66.6% of total ad spending this year -- up from 57.4% in 2006 and 53.75% in 2005.
The Big Four will nab 66.6% of total ad spending this year -- up from 57.4% in 2006 and 53.75% in 2005.

Two-thirds of the $19.5 billion expected to be spent on internet advertising in 2007 will be placed with the four biggest web companies, according to an eMarketer report issued this week. Google will nab the largest share, with 32.1% of total ad spend, Yahoo is next with 18.7%, AOL follows with 9.1% and MSN is fourth at 6.8%.

66.6% of total ad spending
That estimate -- that the Big Four will nab 66.6% of total ad spending this year -- is up from 57.4% in 2006 and 53.75% in 2005. Some of the share is attributed to search revenue, which will comprise 42.5% of online ad spending this year, again per eMarketer's estimates.

"Many marketers accustomed to TV commercial placements want the same capability on the Internet: efficient ad buys in a handful of places," according to the report. Additionally, points out David Hallerman, eMarketer senior analyst, in the report, as "traditional marketers move more money online, they tend to find safety in established, mass market brands."

The bright portal story indeed bore out for Avenue A/ Razorfish, which released its 2007 Digital outlook. The report dissected the digital media agency's spending over the previous year and noted a distinct jump in spending on portals: In 2006 24% of its digital media outlay went to portals vs. 13% of overall spending in 2005.

AOL's business-model shift
In addition to brand marketers' need for scale on the internet, there's another reason portal spend continues to grow: AOL's shift over the past year from a subscription-supported business to a fully ad-supported business. Avenue A's billings at AOL, for example, dramatically increased throughout the year; its spending at the portal in the second half of 2006 were triple those from the first half of the year.

Smaller web publishers, especially those online extensions of traditional media companies, still command a minor share of total online ad spending despite their aggressive attempts to ramp up their online presences. Avenue A/Razorfish spent only 9.5% of its billings on the online arms of traditional media brands in 2007.
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