Intel co-op could bring $150 million to the Web

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Internet advertising next year could get an estimated $150 million blast from Intel Corp. and PC marketers as the chip maker's co-op program invades the Web.

Intel next year will allocate 10% of its "Intel inside" budget for the Web, suggesting a $75 million windfall for the Internet based on the estimated $750 million-plus Intel will spend on co-op ads this year. PC marketers must match Intel's Web contribution to get the Internet money.


Intel's investment is sure to make the chip giant the No. 1 Web ad spender. Intel ally Microsoft Corp. last year held that rank by spending $13 million of what was a $300 million online ad market, Jupiter Communications estimated.

Intel subsidies largely created the robust PC ad market, and the "Intel inside" logo soon will be as ubiquitous on the Web as it is in PC print and TV ads.

The Web "is an interesting emerging medium. It's something we feel can really showcase the technology," said Jami Dover, Intel's director of co-op marketing.


Currently, Intel gives PC makers a 6% rebate on chip purchases toward the co-op ad program. Of that, 4% can go to print ads and 2% to broadcast buys. The money can be applied to two-thirds the cost of a print ad and half the cost of TV, radio or in-flight ads, with PC marketers kicking in the rest.

In a special promotion running from Sept. 1 to Dec. 31, Intel will let PC marketers use as much of that 6% as they want for Web ads.

Then, starting Jan. 1, 1998, Intel will let PC marketers allocate the 6% rebate any way among print, broadcast and Web ads for a company's first $500,000 in rebates. Beyond that amount, a PC marketer will get 2.4% for print; 1.8% for broadcast; 0.6% for Web; and 1.2% to be spent on the marketer's choice of print, broadcast or Web ads.


In the revised program, Intel will pay half the cost of a Web ad and 60% of broadcast or print. PC makers must pay the rest.

The revamped program gives PC marketers greater flexibility in allocating ad spending. But Intel still considers the Internet a young medium. So, for the program this fall and possibly into next year, it will require pre-approval of Web ads to ensure they promote Intel's mission.

Just as Intel uses its clout with print and broadcasters, the chip marketer is asking Web sites to offer special deals and discount packages to Intel co-op advertisers.


Intel wants Web media to present ideas that go beyond the banner ad. Intel will encourage PC marketers and Web media companies to employ Web event sponsorships and use push technologies, such as PointCast, to deliver ad messages rather than simply relying on banners.

"The banners are interesting but kind of limiting at this point," Ms. Dover said.

Copyright July 1997, Crain Communications Inc.

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