Will Content Quality Still Be a Driver of Advertising Online?

Numerous “analysts” (including me) have been predicting that user-generated content sites like MySpace and YouTube, despite their runaway popularity, will not receive all (or even much) of the big brand ad dollars that will be poured into online advertising across the next few years. The reason — advertisers still care about the quality of the content and context where their ads appear, and MySpace and YouTube have too much “crappy” content that can’t be guaranteed to meet given standards. Conversely, these sites are appropriately wary of alienating their users with “traditional” advertising (i.e. display ads, pre-roll video ads), something that most users of traditional media sites have already come to accept.

The analysts at Veronis Suhler Stevenson have put some numbers behind this school of thought:

Traditional US media companies are increasing their share of the fast-growing online advertising sector relative to internet rivals such as Google and Yahoo, according to a new study.

In one of the first detailed reports of the relative positions of traditional media companies and their online competitors, Veronis Suhler Stevenson, the private equity group, has shown that, contrary to many people’s expectations, media companies are holding their own in the digital space.

VSS will report on Tuesday in its annual comprehensive study of the media business that this year, of the $22bn expected to be spent on online and mobile advertising in the US, traditional media groups’ share is forecast to be 37 per cent, up from 23 per cent in 2000.

By 2010, when internet and mobile advertising is due to reach $44bn, traditional media companies are expected to capture $17bn, or nearly 39 per cent, of the total.

If they are smart, the MySpaces and YouTubes of the web can capture a whole new bucket of “social” marketing dollars, the same way that Google did with search marketing. Some traditional media companies will grow or hold onto their share of online ad dollars by acquiring these social media/user-generated content sites — News Corp is of course the de facto poster child with its acquisition of MySpace.

But another key to traditional media companies’ success may be the “quality” of their content (and I put the best blogs and other independent, high quality content producers in this category). The theory here is that the old symbiotic relationship between content and advertising will survive online (even as advertising increasingly becomes content), and that companies will continue to see a direct relationship between perceptions of their brands and perceptions of the content and context where their brand messages appear.

Of course “quality” of content is in the eye of the beholder — but like judging pornography, we all make instinctive judgments about content quality — how many brands do you really think will want to ride along with a video of someone lighting a fart (amusing as some may find such videos)?

Google is many ways proof that content quality still matters online — on Google’s search results page, the measure of quality happens to be relevancy, but it’s a measure of quality all the same.