Net players say marketers still give Web short shrift

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Online advertising pros greeted the news last week that online advertising will reach $9.1 billion in 2004, not with euphoria, but with a plea that marketers and agencies give the Internet the same respect they give to other channels. After all, the $9.1 billion, from eMarketer's Ad Spending report, represents a projected 25% growth spurt since 2003, but only 3.4% of marketers' overall advertising budget.

The online ad spend, they grouse, should at least approach the 14% of media time consumers devote to the Web. "Three percent is insufficient when you look at it in terms of the shifting consumer behavior over the past year," said Matt Freeman, worldwide CEO, Tribal DDB Worldwide. "This broad shift hasn't been realized by marketers."

Joanne Bradford, MSN's chief media revenue officer, said, "If we were to take our share-14%-and apply a little bit of a discount from print and TV, we should be getting 7% to 12% of marketers' budgets."

The 3.4% share only includes online display ads and search. If Web site development, e-mail, gaming and customer relationship marketing were included, the share of overall ad budget "would be closer to 8% or so," noted Dawn Winchester, VP-client services, R/GA.

In fairness, the last six to 12 months have seen a gold rush of Fortune 1000 marketers to the Internet, thanks to a confluence of factors including the penetration of broadband to nearly 30% of U.S. households, according to eMarketer. What's also encouraged marketers is the proliferation of measurement tools that can prove the effectiveness of a campaign and improvements in online creative, such as video spots.

"Today, [adoption] is driven more by reality and less by emotion," said Fred Rubin, partner-director, Interpublic Group of Cos.' iDeutsch and directDeutsch.

trail blazers

But the online ad spend is still around 4%, except for certain trail-blazing sectors like entertainment, travel, telecom and financial services.

American Express will not specify what its online marketing percentage is, but it was already spending more than 3% in 1998. Meanwhile, its TV spend has shrunk from 80% of the budget in 1994 to 35% in 2004, John Hayes, chief marketing officer, said at an Advertising Age's Madison & Vine conference in February.

For Internet phone service provider Vonage, online is "where the money is," said Ian Wismann, director-marketing, who spends much more than 3% of his budget online.

Equating the Internet to the growth of the cable industry, Web players say 3.4% is remarkable for a 10-year-old industry. As more consumers go online, more and varied brands will hazard the risk to reach them. "Marketers follow eyeballs," said Wenda Harris Millard, chief sales officer, Yahoo!

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