SpectatorBytes

Yesterday, AOL announced the formation of its publishing unit MediaGlow. This event marks an important milestone in the evolution of publishing on the Web. Big congratulations to Bill Wilson. It is a formal recognition that the value of publishing on the Web will primarily be accrued by highly-targeted sites that are able to create deep relationships with their niche audiences. The acquisition in 2005 of Weblogs Inc. has helped AOL understand this quicker than most other large Internet players and traditional media companies. AOL has realized that it can leverage its homepage and overall audience reach to help accelerate the growth of its publishing network and thus effectively create long-term value for the AOL asset.

This model is likely to be imitated by others publishers (traditional media players, internet portals and startups) as it represents a way for content producers to build value at scale on the Web. While this type of site-networks have existed for several years, several recent developments are helping this model to demonstrate greater promise in recent months:

- Second-generation publishing tools and content management systems (Wordpress, Crowd Fusion, etc.)

- Clearer understanding of the search ecosystem and value of SEO

- Focus on systematic curation of third party content

- Better editorial practices (e.g., how to effectively engage audiences, effectively leveraging user generated content)

- Sophisticated community building techniques  (including SEM) and increased focused on community management

- Rich tools for syndication across the Web - from sites to social media platforms (Twitter, Facebook, Digg, etc.)

The challenges for the publisher networks continues to be around developing the right value proposition for brand/premium advertisers.  This type of revenues are critical to build value at scale. Most advertisers still seem wary of spending on these new niche publications and appear to continue to stay close only to those traditional brands with whom they have had long-standing relationships.

However, this is likely to change over time if the right value proposition is developed for advertisers. A similar process took place with cable networks during the 1990s. As audiences continue to aggressively migrate from traditional media to online, these publisher networks will be populated by audiences that can no longer be reached via traditional media. Thus, these publisher networks will emerge as a new vehicle for marketers to reach their customers at scale.

In order to accomplish this goal, these networks need to be supported by sales organizations which are designed to effectively and efficiently sell multiple brands. This is easier said than done. Most sales forces are designed sell a single brand or a particular audience. Re-designing them to sell multiple brands is much more difficult.

Ad networks such as Glam, Sportgenic, Netshelter, etc. and now, more officially AOL are trying to figure out how to design sales efforts around multi-branded networks. The quicker they succeed, the quicker they will be opening the door for brand revenues (not related to portals) to start flowing into the Web. Ultimately, the marriage of this sales-force centric ad network and a robust publishing network will unlock significant value.

The economic downturn is not making things easier for these efforts but I am rooting for their success as it would help the online publishing industry overall.