Kris Oser Reports From San Francisco

OLD-LINE MARKETERS DRIVE NEW SURGE IN ONLINE ADVERTISING

Nielsen Study Documents Hefty Shifts to Internet

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SAN FRANCISCO (AdAge.com) -- In a major milestone for online advertising trends, traditional marketers -- rather than tech and dot-com companies -- drove the surge of
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new Internet advertising placements that pushed the first quarter's ad spending to a new record high.

Earlier in the week the latest Internet Ad Revenue Report by the Interactive Advertising Bureau and PricewaterhouseCoopers said online ad revenues in the first quarter of this year hit $2.3 billion, 38.9% higher than the same quarter of 2003.

Large increases
Yesterday, a new Nielsen/NetRatings study released at the Ad:Tech Conference and Expo indicated that the boost in ad spending was led by a growing number of old-line bricks-and-mortar corporations that have made large increases in the amount they spend on Internet-based marketing activities.

AT&T Wireless Services, for instance, increased 1,262% the number of online ad impressions it purchased as part of its overall advertising campaigns this year over last. That huge boost made it No. 1 among all industry segments in online advertising increases.

Similarly, online ad placements by pharmaceutical marketer Schering Plough leaped 737%, while financial services consumer credit firm MBNA Corp. grew 471%.

Know what works
"What's happened is large companies in 2002 and 2003 were experimenting online," said Charles Buchwalter, vice president of client analytics at Nielsen/NetRatings. "They've learned a lot and many advertisers know for a fact what works online."

Among automotive manufacturers, DaimerChrysler increased its Internet advertising by 461%. Safeway led the retail goods and services category with a 440% leap, and Ameriquest Mortgage was No. 1 among consumer loans companies with 226%.

Other sector leaders were Apollo Group in public services education at 163%; News Corp. in the entertainment movies sector at 133%; Cendant Corp. in travel vehicle rental at 62%; and SBC Communications in the telecommunications, ISP and broadband area with 39% growth.

In general, traditional brick-and-mortar brands are still spending only an average of about 3% of their overall marketing budgets online, Mr. Buchwalter said. But "for the next two years online is going to grow robustly."

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