Online Advertising - Online Advertisers

ONLINE ADVERTISERS

According to a IAB report, consumer-related advertisers accounted for 31 percent of online advertising in 2000, followed by computing (18 percent), financial services (14 percent), business services (nine percent), and media (eight percent). According to AdRelevance,Amazon.com was the most advertised company on the Internet for eight out of nine weeks during the 2000 holiday shopping season. The company employed a combination of brand recognition and direct marketing advertisements in its campaign. Before the holiday season, 270 million of the company's 275.3 million ad impressions were branding impressions, while only 5.3 million were direct marketing impressions. By the end of November,Amazon.com had begun to place more emphasis on direct marketing impressions in an effort to achieve immediate results. During the last week of November, Amazon.com ran 320 million branding impressions and approximately 212 direct marketing impressions. Seven of the company's top 10 holiday ads offered free shipping. Each direct marketing ad had 4 million impressions, while each branding ad had 750,000 impressions.

Amazon.com advertised on more than 100 Web sites, but it made an effort to dominate on the top sites. The top five sites it advertised on were MSN, AOL, Netscape, Juno, and Excite.Amazon.com was the number one advertiser on four of those sites and third on Excite behind the Home Shopping Network and First USA. AdRelevance reported that Amazon.com spent the most on Internet advertising in December 2000 with its $61.8 million budget. It led all advertisers with nearly 3 billion ad impressions. Amazon.com spent 42 percent of its ad budget in December on MSN. Other major advertisers in December 2000 included Barnesandnoble.com at a distant second with $23.8 million, Classmates.com with $19.3 million, First USA with $11.2 million, and eBay at number five with $11.1 million spent on online advertising. The ad spending figures include all Internet banner and button advertising, excluding house ads and sponsorships. The most heavily advertised company, Amazon.com purchased 6.1 billion impressions in the fourth quarter of 2000. The other top five advertisers during the quarter were Microsoft (4.1 billion ad impressions), MSN (3.2 billion impressions), America Online (2.6 billion impressions), and Nets-cape (1.6 billion impressions).

Advertisers also like to advertise on their own Web sites. A study by AdRelevance found that 28 percent of U.S. Web sites used self-promotional advertising. In the entertainment and society sectors, some 30 percent of ad inventories were used for self-promotional online ads.

Although there were cutbacks in online ad spending in the second half of 2000, dot-coms continued to spend more as a group than traditional brick-and-mortar companies. According to AdRelevance, Internet companies of all sizes purchased 769 million ad impressions on average during the fourth quarter of 2000, more than twice as many per firm than traditional companies. Mid-sized Internet companies purchased an average of 454 million impressions per company, roughly four times as many as mid-sized traditional companies. Another report issued by Ad-Relevance in November 2000 indicated that traditional companies were beginning to show more confidence in the Internet as an advertising medium. The fact that half of AdRelevance's "Hot 100" online advertisers were traditional, non-Internet based companies suggested that online advertising was becoming a bigger part of those companies' overall marketing strategy.