Put AT&T WorldNet Service into the first category. The Bridgewater, N.J., unit of AT&T spends about 25% of its ad budget on the Internet.
"The reason we decided to do advertising on the Web is because it is our audience," said Lane Best, director of product marketing for AT&T WorldNet Service, which sells Internet access services. "It didn't take a lot of risk for us to decide it was the medium to use."
AT&T, however, is ahead of the pack when it comes to spending ad dollars online.
Even Internet technology companies like Silicon Graphics still spend only a small portion of their ad budgets on the Internet.
And Bell Atlantic Corp., the regional Bell operatgets on the Internet.
And Bell Atlantic Corp., the regional operating company that counts among its many products Internet access services, is looking carefully at the value of Web advertising.
Bell Atlantic has been spending ad dollars on the Internet since 1995, last year placing ads for its Internet access, ISDN, long distance and corporate services on the Internet.
BEST WAY TO SELL?
However, said Susan Bell, director of media strategies, "We have not found that we are absolutely positive this is the best way to sell our products."
For certain products, such as phone service, the challenge is identifying effective regional sites, such as The Washington Post, and keeping up with constantly changing technology, said Ms. Bell.
"The 1997 trials will have to show a significant increase in sales," she added, before the phone company decides to allocate a large portion of its ad budget to the Internet.
And this from a high-tech company. Lower-tech concerns are even more hesitant.
The reason? Tools for usefully measuring Web advertising effectiveness just don't exist yet.
"It's still a new medium and it has not proven itself," says Bob Storch, senior partner and media director at New York ad agency Poppe Tyson.
"One of the biggest drawbacks to the biggest advertisers is they're used to numbers," Mr. Storch says. "There is no source that says, if I buy a travel site, I'll reach 55% of women ages 18 to 34."
Companies that are serious about spending ad dollars online want to know how effective their ads are, and this means knowing not only what the click-through rate is, or the percentage of users that click on their ads from Web sites, but if their online ads are generating qualified leads or actual purchases.
OBSTACLES IN THE WAY
"The Holy Grail of Internet advertising is a system that can track banner-to-sale," says Seth Goldstein, president and CEO of SiteSpecific, a New York interactive ad agency.
Unfortunately, he says, "Nobody has figured it out."
However, clients with limited online ad dollars want to know what they're getting for their money, so some media sites, networks and agencies are making strides in providing clients with this information.
For example, SiteSpecific placed ads last summer on the DoubleClick network, which provides packages of Web sites targeted at advertiser's specific needs, as well as other Web sites, for an online campaign for 3M Co. (NetMarketing, October 1996).
The goal of the Internet campaign was to generate qualified leads for 3M's $7,000 MP3080 video projector, and through November the program generated more than 2,200 leads, Mr. Goldstein says.
Some advertisers that are buying space on the Internet say that as long as the Web sites can deliver traffic and click-through information, they can compile lead generation and buy-through data on their own.
AT&T WorldNet Service, for example, is able to determine how effective its ads are by tracking software downloaded from its site by users coming in from ads on other sites.
In the end, developing a standard measurement tool is going to require cooperation among media networks such as DoubleClick, which brings advertisers a network of Web sites, the big Web sites themselves such as Yahoo and C/Net, and merchants advertising on the sites.