Earlier this year, Jumpstart Automotive was acquired by Hachette Filipacchi for $110 million. While most industry analysts looked at the acquisition as part of the macro trend of large media companies expanding aggressively into digital, others saw it as more indicative of traditional media’s growing interests in vertical niches.
According to Media-Screen’s NetpopResearch, consumer interest in the products and brands advertised on smaller sites and their responses to that advertising are higher than on larger sites. Forty-two percent of respondents say sites with less than 1 million unique visitors per month advertise products and brands of interest, compared to 39 percent of respondents who say sites with more than 1 million visitors advertise products of interest. Although the difference is relatively small, it’s statistically valid, Media-Screen Research Director Cate Riegner pointed out.
While search engines and the major sites and portals generate the lion’s share of online ad revenues, consumers are searching for and visiting more niche sites. Vertical networks are more audience-obsessed than their large portal counterparts. They’re more tuned in to what their constituents demand and can quickly add new content and functions. Presuming their rise in traffic and influence continues, how will vertical properties impact consumer actions online?
Riding the Long Tail
Vertical networks, loosely defined as smaller, highly targeted sites operating in specific business or interest-based categories, are gaining momentum in the media community as marketers seek to ride the economics of the long tail.
The Web’s limitless capacity and endless ability to cater to specialized interests have long led analysts to predict the eventual rise of vertical sites and the partial decline of large, general portals.
The important question isn’t whether horizontal is out and vertical in, but how the portalization of vertical content and sites will impact users’ online behavior. In behavioral targeting, the user’s mindset is important, and since vertical sites require a targeted mindset because of its content focus, users are often predisposed when it comes to actions and behaviors.
Growth of Vertical Search
Though it’s been quietly buzzing since 2005, vertical search represents one of the hottest online growth areas.
E-consultancy, a U.K.-based industry authority on e-commerce and online marketing, recently released a study, “Vertical Search Report ’08,” that reveals that publishers see vertical search as an opportunity to “reclaim the online community from Google.”
According to the report, 80 percent of more than 500 media and Internet professionals surveyed already use vertical industry or sector-specific RSS feeds, and 54 percent have personalized home pages.
Some 93 percent said they would be “very likely” or “quite likely” to use a search engine that focused on serving their specific business or work needs. Fifty-three percent said that “faster access to desired information is a major benefit of vertical search.”
The challenge doesn’t seem to be whether there’s a need for vertical search, but how vertical publishers will disrupt this habitual use of popular search engines by producing a search tool that’s better, or at least perceived to be more relevant, than generic large search engines.
Many of the larger media players have already tapped into vertical search. Google recently released Google Scholar to search academic publications, and Yahoo has its Creative Commons, an engine that searches licensed material. Even Amazon.com is making dozens of vertical search engines available on its nascent engine, A9, and has started inviting vertical search companies to make its engines available on its site.
What This Means for Online Media
With the plethora of acquisitions and mergers in our industry, expect the spotlight to shine brighter on vertical sites as big portal players and large vertical networks continue casting about for expansion opportunities. Vertical sites may increasingly assume the look and feel, and even the functions, of portals in hopes of providing a comprehensive starting point and natural home base for users steeped in their segment.
Rather than the critical mass, it’s perhaps the critical niche that will drive behaviors in the future.
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