Going Vertical !!!

By Cory Treffiletti

With the entire buzz being generated through numerous consolidations and mergers, it's interesting to witness the trend towards vertical ad networks and away from the previous model of broad-reach, broad-targeted networks.
The first wave of the network model focused on large reach networks, such as ValueClick and Advertising.com. These folks aggregated a large volume of audience for advertisers to speak to, and allowed for contextual targeting and demographic targeting, mostly via contextual relationships. The second wave focused on behavioral targeting being layered over the existing infrastructure, offering advertisers the ability to reach the same audience either contextually or based on previous traffic patterns and usage, thereby giving birth to behavioral targeting. The current trend appears to be focused on building a singular portal to reach a specific audience by tapping into them via a collection of smaller to medium-sized sites of a similar contextual relevancy.
One of the first (apparent) players in the category was Gorilla Nation. The company amassed a large collection of sites reaching the entertainment category, and has continued to build them over the last few years, while acquiring more into the mix. Recently we saw Jumpstart Automotive Media be acquired by Hachette Filipacchi for a large sum of money, aggregating together a large collection of automotive targeted sites and inventory, in some cases building relationships with larger portals to weave together its inventory, either contextually or through behavioral targeting, to reach in-market autobuyers.
Even the start-up world is getting into the act, with properties like Real Girls Media and its first site, DivineCaroline. These folks are trying to pull together women-targeted sites in much the same way that early trailblazer iVillage did, but is focusing on the Web 2.0 elements such as blogs and user-generated content. Going beyond the network model, we are even seeing the development of platforms and services to help advertisers reach the types of verticals they are interested in. Centro is a platform and service that objectively aggregates together local online content for advertisers, while Adify is a start-up that professes to build out vertical networks for specific advertisers, then is able to reuse that inventory, building a marketing asset for later growth.
All of these models signal the shift away from large aggregate audiences towards the development of solutions to reach the long tail and provide advertisers with the ability to go deeper into the lives of their audience. In our planning way back in 1996, we used to say that this was a means for reaching the portal audience without advertising on the portals. It was a means of going around them when they cost too much or wanted too much in the form of an upfront deal. Now we know that these are all ways to build to the ever-important tools of reach and frequency. These long-tail vertical networks provide access to a targeted audience at a lower cost, in a way that is attractive to advertisers. You are able to do more than just run banners and buttons. You are able to run large page take-overs and larger rich media units, but in a smaller, more efficient, and possibly more effective environment.
The venture capitalists seem to have gotten the message loud and clear. The majority of the dollars I see going to these models are focused on video and vertical. Of course, that means that a vertical video network or platform would be the most attractive option for VCs and advertisers alike.
Please excuse me while I go work on that business plan!