Some dot-com and technology advertisers are bowing out of Internet behemoths Business 2.0, Fast Company, The Industry Standard, Red Herring and Upside--just as the phone book-size publications vie for dominance based in part on their ad-page count.
Citing ad dilution, high rates and a low return on investment, advertisers including Asimba.com and Radiate are shifting their print budgets to niche magazines or public relations.
Radiate, an ad-insertion technology developer backed by CMGI @Ventures, will pull up to $1 million--two-thirds of its annual print marketing budget--it had allocated in March for Business 2.0, Fast Company, Red Herring and Upside effective in August, said VP-Marketing Jeff Ready. Ads were to run in the magazines during the fourth quarter this year and first quarter of 2001.
"That's not to say we will never run ads in those pubs," Mr. Ready said, "but the time is not right for us to be in there."
Mapping its ad strategy, Radiate "really took a look at where we were going to get the best bang for our buck," Mr. Ready said.
"I haven't talked to anyone who says they've had success advertising in those publications. You pick up those magazines and they are about 450 pages thick, and two-thirds of the pages in there are full-page ads for some company trying to brand themselves." He added, "There's so much noise." High ad rates also factored in his decision, he said.
Mr. Ready said Radiate will reallocate the money to trade publications targeting software developers, publishers and the ad community. The company also will expand online advertising. Kimball Group, Chicago, is Radiate's agency.
'NOT A GREAT WAY TO SPEND'
Dejima, a wireless software provider based in San Jose, Calif., also decided to hold off advertising in Internet economy-focused magazines such as The Industry Standard and Red Herring, said Madeline Duva, VP-marketing.
The company has not yet advertised, but has been planning its strategy. Since it's relatively small, Dejima plans to use public relations efforts initially rather than Internet-focused magazine ads. "You are getting these books that are 3 inches thick and it doesn't seem like a great way to spend your money," she said.
Asimba.com, a sports and fitness lifestyle site also backed by CMGI, too is concerned about ad dilution in magazines such as The Industry Standard. As a result, Asimba decided to run the print portion of its $7 million to $10 million campaign from TBWA/Chiat/Day, San Francisco, in sports and fitness magazines. Its first ad ran in the June issue of Shape.
VP-Marketing Adam Roth said the "huge amount of clutter" in Internet magazines "definitely . . . factored into our decision. You could pick up one of those issues and do curls with it."
"We don't have [advertisers] pulling out right now," said Linda Sepp, associate publisher of Fast Company. "We do not have a clutter problem." She cited internal efforts to monitor the size of the monthly--its July issue clocks in at 388 pages--and keep the advertising-to-edit ratio in check.
"My reaction is [the advertisers] aren't paying close enough attention," said Gini Talmadge, group publisher of Upside Media. She added the issue is not exclusive to new-economy and business titles.
"All the books are crowded now," she said, citing Business Week and Vogue. "Where are you going to go?"
Through May, according to Publishers Information Bureau figures, The Industry Standard ad pages were up 474% to 3,452.5 ; Business 2.0 was up 318.6% to 1,212.6; Red Herring, up 211.2% to 1,178.2; and Fast Company, up 54.2% to 747.3. Upside figures were not available.
Contributing: Jon Fine
Copyright June 2000, Crain Communications Inc.