PRICING ON THE 'NET CONFOUNDS SOME MARKETERS

By Published on .

Most Popular
While marketers everywhere are rushing to explore the Internet, there is little agreement on how to set prices.

The costs can range from a few thousand dollars right up to $1 million-and virtually every price in between.

HotWired, for instance, charges advertisers $30,000 for an eight-week sponsorship, while ESPN recently said it plans to seek $1 million for a one-year sponsorship of ESPNET, an online service it plans to expand from Prodigy to the World Wide Web.

And others, such as Time Inc.'s Web-based Pathfinder, haven't yet begun to solicit advertisers formally (although Pathfinder made its debut with AT&T as a sponsor).

"We are working it through," said Bruce Judson, general manager of Time Inc. New Media. While that process continues, he said, no official prices have been established.

"It's incredibly vague right now," lamented Phil Frank, VP-associate media director at Ammirati & Puris/Lintas, New York.

"How are you going to measure delivery? Nielsen is not doing it. MRI [Media-mark Research Inc.] is not doing it. It's a little bit of wait and see."

Experts estimate the World Wide Web is accessed by 2 million to 3 million computer users, although that number is growing quickly.

Speakers at a recent seminar on World Wide Web advertising urged content providers to price their sponsorship fees low at first.

"Let's provoke use by being affordable," said Richard A. Segal Jr., managing director of Cincinnati, Ohio-based agency Hensley, Segal, Rentschler. "In order for us to move this boulder of Internet marketing, we're going to have to make it affordable so everyone from entrepreneurs to major corporations is willing to try it."

The conference, sponsored by publisher Mecklermedia Corp., drew about 140 people to the New York Helmsley Hotel.

"I don't care what business you're in," Mr. Segal said. "I challenge you to cite a single market situation where your company, or your client's company, doesn't feel the pressures of fragmenting markets, under-informed customers, insufficient cycle time or the rapid commoditization of their goods or services."

He added: "Internet and specifically the World Wide Web are technologies perfectly aligned to help certain kinds of businesses turn these competitive pressures into enterprise-building energy."

Some say Internet ad pricing should be flexible.

"You shouldn't speak of buying advertising on the Internet in the traditional sense. What you are doing is buying association with a content provider," said Matthew Cutler, director of business development with Boston-based net.Genesis.

Even then there are limitations, Mr. Cutler said. He said that for the moment, the "reach," or total audience receiving a sponsored message on the Internet, is far less than that of conventional media.

"Reach will never equal that of traditional media," said Mr. Cutler, "but it can bring depth of information. If the average consumer spends five minutes in a given area, isn't that worth more than a 30-second commercial?"

In this article: