Established Firms Drive Net Ad Spending

Traditional firms are advertising online at a higher rate than their dot-com counterparts, according to a new report by Jupiter Media Metrix company AdRelevance.

Fifty percent of AdRelevance’s Hot 100 online advertisers were traditional, non-Internet based companies during the month of October, compared to only 41 percent in January.

Growth Spurt

The number of new companies advertising online for the first time is growing at an average rate of 14 percent per month, translating to more than 1,000 new companies per month since March, and a 157 percent increase since January.

“New advertisers are coming online on a regular basis. Despite a financially slower third quarter, it's interesting to note that far more advertisers came online for the first time in August than in any month prior to it this year," said Charlie Buchwalter, vice president of Media Research for AdRelevance.

Shakeout No Deterrent

The ongoing shakeout of stumbling dot-coms has not prevented a steady growth in online advertising so far this year. During the third quarter of this year, 5,489 new companies began advertising online -- far surpassing the totals for both the first quarter (2,935 new advertisers) and second quarter (3,879 new advertisers).

Planet Project led all online advertising buyers for October, running a campaign consisting of 110 million impressions. The list of top five Net advertisers was rounded out by Major League Soccer (30 million impressions), Norelco (16 million), Teloquent Communications (11 million), Saks Fifth Avenue (11 million), and Sam’s Club (11 million).

Marc Ryan, director of Media Research for AdRelevance, told the E-Commerce Times that the positive entrepreneurial spirit fostered by the Internet is starting to emerge once again.

“We’ve come out of the summer slump,” Ryan said. “A lot of those [dot-coms] going down and out are already there or are shortly on their way. The holiday season will account for quite a bit. Things are starting to look up again for a lot of companies.”

Measure of Success

Ryan said that traditional companies are beginning to show more confidence in the Internet as an advertising medium, with online advertising becoming a much bigger part of companies' overall marketing strategy.

“The cost of entry for the Internet is much lower than for other mediums,” Ryan said. “A little money gets lots of notice on the Internet. Traditionals will outpace dot-coms because that’s where the money is. They control the majority of advertising money to be spent.”

Whether this trend continues, however, ultimately depends on the measurability of online advertising.

“No one wants to throw away money. For dot-coms [Internet advertising] makes sense, because that’s where their customers are,” said Ryan. “But traditionals need to know there’s a way to measure what they’re doing. As online systems become simpler, easier to understand for traditionals, we’ll see more of their budgets come online. Online standards will help the industry as well.”