The founders of Flycast Communications are back, this time creating tools that enable small publishers to manage the ads that appear on their sites. The new venture, Adify, works with publishers to create vertical ad networks where the content owners directly interact with advertisers.

Advertisers sign up through a "self-service" form on the publisher's website, with Adify providing the infrastructure and reporting, and the publishers setting pricing and determining who gets to advertise on their site. Adify stays in the background and takes a 20 percent cut of the advertising revenue.

Publishers who may not have experience in setting ad rates or dealing with the large ad networks can choose Adify's suggested rates or set their own. For example, advertisers can sign up to appear on BikePortland.org through a storefront that gives options for sponsorship, CPM, or CPC ads.

Adify is targeting "long tail" niches by building community through direct communications between publishers, according to CEO Larry Braitman. He says the future of online advertising is not in monolithic networks, but in thousands of niche networks that are much closer to customers and community.

"Community of interest" based advertising will give publishers the opportunity to increase their revenue over slapping on some contextual advertising that may be of questionable relevance. Community members (be they supporters of a non-profit organization or readers of a blog) are much likely to buy from advertisers of their favorite sites than a mega-retailer on a generic portal.

The "verticalization" of ad networks, search engines and marketing, is clearly happening as Internet advertising has gotten too unwieldy to satisfy many publishers. This will create a need for a directory or search engine that specializes in discovering niche markets.

News site Topix.net has partnered with ShopLocal.com to create an advertising system to bring store circulars online.

Topix.net customizes news by region, aggregating the news around your town from multiple sources. The localized sites will include ads from ShopLocal that show offers from the chain stores in your area.

For example, a Walgreens skyscraper interactive ad lets you choose a category, and shows the weekly offers without having to leave the page you are on. This is a great use of Web 2.0 technology, and gives value to both consumers and advertisers.

Google, Yahoo and the other search engines should adopt this strategy of promoting local commerce as part of their customized search, be it news or standard search.

According to a new online survey 87 percent of people occasionally or regularly research their products online before going to a store in person. The BigResearch survey says consumer electronics was the most popular category.

Google was the first choice for product research of 22 percent of the people surveyed, more than than Yahoo, Amazon and eBay combined. That so many people research online before hitting retailers is great news for Google et al, but not so much for advertisers who would like to see those leads converted into sales.

People may continue to go the brick and mortar route because they still want to see or touch the item, or because they may feel they can get a better price (by avoiding the shipping charges).

Marketers can address these issues by including more product information online, such as more images and deeper specifications, or by offering a price guarantee. Amazon.com etc could offer to accept returns of an item if consumers were able to get it for less in person. This would assure people that their purchases were a good deal, and the percentage of people who returned goods would likely be very low.

In a different study, BigResearch says more people are staying home to shop online and driving to stores less because of the rising gas prices. There's always a silver lining.

RSS remains an underutilized format for distributing streams of information between marketing organizations. While advertisers are slowing "getting it," by adopting RSS advertisements and distributing coupons, RSS has yet to take hold as a mechanism for sharing data between publishers and their affiliates, and ad networks and their clients.

The data feeds for pushing product catalogs to affiliates should all be in RSS, as well as the Web traffic and advertising campaign analysis. The standardization speaks for itself, and the integration of RSS reading into Microsoft Excel (enhancing today's XML capabilities) and new RSS readers that can mix and match data will simplify information management.

Although LinkShare doesn't mention RSS in its press release, the company is making it easier for affiliates to filter the data they receive through the Merchandiser-by-Category option. This creates subsets of affiliate feeds so that niche publishers can select only the products that are relevant to them.