Will Portals Make Money from Advertising ?

Life is tough for Portals, Content and Social Networking Sites. The Display Ad Businesses of these sites are struggling to make money. Billions of Page Views, Millions of Users but Profits are still a mirage.

Consider this. The large Indian Portals today have more daily users than the readership of all English Newspapers put together in this country. But revenue is a different ball game. No Portal
makes even 5pc of what the TOI rakes in every year.

So what are the issues here ?

Search is taking everyone's cake. The CPMs on Search according to some estimates are 30 times the CPM on Regular Display advertising. "Intent" is a great targetting tool and gets high clickthroughs. Allow for 2 ads on a Portal Page and you can say 70 Million Search Views = A Billion Portal Page Views. The reality is Google India makes more money through advertising than Rediff, Yahoo India, Indiatimes and Orkut put together.



Most Large Advertisers use google as a benchmark and demand the same rates from Portals. While you can debate that Google Ads are a lead gen tool and not advertising; to advertisers its not very clear that there is a branding element to most display ads.

So how will publishers survive if they dont make money ?

Its a big IF but clearly massive progress needs to be made in the following areas..


1) We need better targeting. Most Portal Display Advertising is largely untargetted. Its at the same stage as advertising in Print. You target by publication/site and not at a user level. There is information available about the person (his age, sex, location, salary etc) on the internet. There is information on his surfing habits, which site he came from, what he is reading on the Portal, his search history etc. Privacy Concerns need to be handled but Adnetworks or 3rd Party Information Providers need to aggregate user data across websites and invest in algoritms to help Portals show more relevant ads.



2) Portals clearly need to get more brand advertisers to bite. They need to be able to clearly differentiate Banner Ads from Google Ad Links. This wont happen with regular display ads. Portals and Content Sites need to create High Quality Rich Display Inventory on the site. Easier said than done in India atleast with BroadBand penetration being what it is.



3) Lastly in India atleast Portals need to do a better job of getting Marketeers on the site. Most traditional marketeers still dont understand CPMs and Clickthroughs the way they understand TRPs and Readership. Some Investment in 3rd Party Research Studies and Education to help Advertisers compare the long term impact of Brand Advertising on the Internet vs Advertising in Print or TV is absolutely critical.