Marketers link up to tune of $54.7 mil

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Jupiter study finds $11.8 mil in commercial, $42.9 mil Web support for '95

Online advertising may not be making much of a dent in traditional media spending, but it's shaping up to be a major market.

Marketers spent $54.7 million to place banners, or "links," on World Wide Web sites and on commercial online services last year, according to the 1996 Online Advertising Report from consultancy Jupiter Communications, New York.

Of that figure, $11.8 million went toward commercial online services, and a sizable $42.9 million funded advertising on the Web--most from late in the year.


Gauging the accuracy of those figures is difficult, however. Industry executives agree millions of ad dollars are being spent online, but determining the actual amount is tricky since many ads are purchased at discount rates or as value-added placements for traditional media buys.

Jupiter says it took 20% off ad rates across the board to account for discounting.

As a comparison, a survey conducted by New York-based WebTrack found that marketers spent $12.4 million in the fourth quarter buying links on the Web.

The Jupiter report found that 27% of 1995 Web ad spending--$11.8 million--went to the top 10 sites, further weakening the argument the Web is a level playing field for all media companies.

"It's just not true that none of the old rules apply," said Adam Schoenfeld, VP-senior analyst at Jupiter. "It's a lot easier for Time Warner to get advertising than a startup."


Jupiter predicts that online ad spending will rise to $343 million this year, $1.1 billion in 1997 and $5 billion by 2000. But even at that rate of growth, online will still be dwarfed by the projected $51.2 billion in TV ad spending in 2000.

Jupiter's predictions also assume marketers will continue to buy banner links online, something not everyone thinks is certain.

"The idea of a banner is going to seem somewhat antiquated" as technologies like video and audio become more widely available, said Anders Pers, interactive account exec at Hal Riney & Partners, San Francisco.

Copyright January 1996 Crain Communications Inc.

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