AOL (NYSE: AOL) may be having a tough time attracting marketers to its vaunted Project Devil ads, which promise a larger canvas and greater interactivity than standard banners. Homepage display ad trends at AOL appeared “sluggish” through the first half of this quarter, says Macquarie Capital analyst Ben Schachter, who’s been tracking and comparison these placements from the major portals and YouTube (NSDQ: GOOG) for the past year. In the meantime, YouTube has been able to sell its “masthead” ad unit on its main page practically every day, as AOL fell behind Yahoo (NSDQ: YHOO) in the homepage ad race.
In comparing AOL and Yahoo’s sales of homepage ads, Macquarie finds that AOL’s proportion of custom homepage ads amounted to 17 percent vs. Yahoo, which saw its 25 percent of its homepage ads devoted to the more interactive, premium formats. This was a meaningful decline for AOL, which had 24 percent in Q2 and 26 percent in Q1, when the company led all portals in terms of oversized/custom homepage ad units.
While YouTube has been successful in getting advertisers to sign up for its version of the larger ad units — a sign of its parent company Google’s recent display dominance over Yahoo — it’s still plagued by a lack of diversity in terms of the types of companies buying space within its masthead ad unit.
Media ads made up about half of YouTube’s total homepage ads in the period, up from Q2′s 42 percent as the summer movie season drove advertising spend.
YouTube’s command of media ads is a problem for the the other portals, and something that is especially worrisome for Yahoo, as its display troubles in part led to the ouster of Carol Bartz as CEO. YouTube is clearly taking share from the traditional portals.
To be fair to AOL and Yahoo, neither is concentrating strictly on homepage ads as the be all/end all of their ad strategies. Both offer various formats, such as mantles, audience and geo-targeting options, links to partner. As for AOL in particular, Project Devil ads were never a particular focus of its owned properties anyway. Last spring, Hearst Magazines Digital Media agreed to adopt the Devil ad units for some of its clients, such as Procter & Gamble. There haven’t been too many major announcements since, however.
In between Google’s display power and now Facebook, which is commanding an ever-higher share of display ad spending — eMarketer says that Facebook’s share of U.S. online display ad dollars will rise to 17.7 percent this year, up from a 12.2 percent share in 2010 — the portals are going to have to strengthen their sales forces to face the challenges. But more than that, the shift of audiences and the ad dollars that follow them appear to be part of a larger trend that portals will find more difficult to beat.