Internet advertising reaches $2.3 bil high

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[San Francisco] Internet advertising is not only back, it's booming-and much of the money is coming from traditional brand marketers.

Ad:Tech 2004 opened with the news that Internet advertising revenue had set a new record for the first quarter: $2.3 billion, according to the Interactive Advertising Bureau and PricewaterhouseCoopers. That's the highest amount taken in during a quarter since the companies began tracking ad revenue in 1996. And it's 38.8% higher than the same quarter in 2003.

Attendees felt the ebullient optimism in the supersonic pace and electric atmosphere at the Palace Hotel, where 4,000 of them were shoehorned into overflowing session rooms and narrow expo halls. The hundred or so exhibitors did such unexpectedly brisk business that the most-overheard remark among by mid-afternoon the first day was, "Sorry, I'm out of business cards."

renewed confidence

Those in attendance, mainly online marketing and agency executives, expressed a renewed sense of confidence that had been missing in the years since the Internet bubble burst. "It's like radio in the `20s, TV in the `50s and cable in the `80s," said Michael Stark, owner of real estate portal Postyourproperty.com. "The Internet is it, the most scalable form of advertising," said the small-business man, whose site is 100% based on ads, and who said he receives 1 million hits a month.

The boost in ad spending was led by a growing number of old-line brick-and-mortar corporations, according to a Nielsen/NetRatings study on the explosive growth of ad impressions released at the show. AT&T Wireless Services, for instance, increased 1,262% the number of online ad impressions it purchased as part of its overall advertising since last year. Pharmaceutical marketer Schering Plough increased 737%, followed by financial services consumer credit firm MBNA Corp, which grew 471%.

Search-engine technologies created the highest level of buzz, said Kevin Amos, director-product development at search-engine marketing firm Impaqt. This year's prospective clients are coming from much larger corporations than last year, he noted, and are asking questions that show a higher degree of understanding about search-based marketing techniques.

An even bigger indicator that search engine advertising is leading the charge of dot-com recovery, he said, is the fact that for the first time, "a lot of venture-capital firms have been stopping by" his booth.

The subject matter of the event's conference sessions echoed the product lines being offered in the exhibit hall, with lots of search, e-mail delivery how-to's and a sprinkling of rich media and channel integration on the agenda.

Beyond optimism, the attitude that informed the proceedings was confidence acquired through knowledge. Those dot-coms, techno-wonks and traditional brands that persevered through the bust now understand how the Internet works-and how to work it.

coupling methods

"We've been through the crucible and come out the other side tougher, smarter and better," said Phil Carpenter, VP-corporate marketing at four-year-old travel search engine SideStep, which survived the Internet implosion, the 9/11 terror attacks and the economic downturn to emerge profitable in April 2003.

Marketers of all stripes talked about coupling tried-and-true traditional methods to interactive innovations.

It's time to kill the click-through metric in favor of better audience targeting and tracking, said Robert Pietsch, West Coast sales director at Forbes.com. By next year, he'd like ads to use "more sight, sound and motion through video."

Speaking on a Web publisher's panel, Lorraine Ross, VP-sales, USAToday.com, said her online management team was focusing on different ways to slice and dice inventory by using more behavioral targeting or registration data to identify and price it as a marketable ad package.

"It becomes a matter of sophisticated modeling," she said, rather than just the gross number of page views.

Sounds like people settling in for a long run.

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