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The web of Internet advertising is getting big quick, but there's still an essential group missing: mass consumer marketers.

Companies spent $66.7 million to advertise on the World Wide Web in the first half of the year, according to exclusive data provided to Advertising Age by Jupiter Communications. Second-quarter spending totaled $43.1 million, up 83% from the first quarter.

But only 14% of second-quarter spending was from consumer goods. Automobiles, travel and financial services-three categories thought to be prime candidates for Web marketing-together accounted for just over 10%.


Two-thirds of spending came from Internet, telecommunications and computer companies, all of which have a vital interest in the success of the Web.

For most major marketers, Web advertising still isn't a worthy investment.

The Web "is not a value proposition today in terms of advertising on other people's sites," said Anthony Manson, senior VP-group director at Y&R New Technologies, New York, which manages Web advertising for Seven-Up Co., Whitehall-Robins and others.

"Most clients are still investing in their own Internet sites and intranets," he said.

Web advertising totaled $23.6 million in the first quarter, a tiny amount even compared with the $199.6 million spent on network radio, the smallest of the current measured media. For the Web market to come anywhere near the size of other media, the addition of new advertisers is essential.


Not surprisingly, Microsoft Corp. is the Web's largest advertiser, spending $2.9 million in the first half of the year on links from other Web sites to its own site. Microsoft has remade its business from top to bottom to focus on the Internet.

Netscape Communications Corp. ranked as the top Web publisher, generating $9.7 million in ad revenue from January through June.

But because the Jupiter numbers include $1.25 million payments made by each of five search engines to be listed as primary directories on the Netscape home page, that effectively inflates Netscape's revenue total by a whopping $6.25 million, as well as the ad spending figures for each of the search engines-Yahoo!, Infoseek, Excite, McKinley Group's Magellan and Lycos.

Factoring that spending out, Netscape falls to No. 5 in the list of publishers. Similarly, the search engines, all ranked among the top 10 advertisers, would fall off the top 10 list entirely.

The Jupiter study counted ad banners on 119 Web sites, accounting for 93% of total Web ad revenue, and used published rate cards to determine revenue figures.


When possible, Jupiter checked its figures with publicly available data and with the Web sites themselves. Figures do not include money spent by advertisers to create and maintain their Web sites.

Of the top 15 Web advertisers in the first half, only Toyota Motor Sales USA, ranked No. 13 with $868,900 in spending, isn't an Internet-oriented company.

Procter & Gamble Co., embarking on a major test of Web advertising, comes in at No. 24 with $488,750 in spending, all in the second quarter.

Most industry players-media sites and marketers alike-predict a shift starting in early 1997, as major marketers make Web ad spending a regular part of their marketing budgets.

"We're seeing substantial budgets coming together that are going to change the profile of the top 10," said Ted West, president of Web rep company Interactive Media Sales. "I'm very bullish about the auto category in the next 18 months."


Indeed, the profile of the top 10 changes significantly if the search engines are factored out. Each engine is paying $5 million to Netscape in an approximately 50-50 cash and barter deal over a one-year period to get significant mention on Netscape's NetSearch page.

Jupiter calls this spending ad revenue, though Barbara Gore, publisher of Netscape's Web site, said Netscape doesn't consider it that way.

Factoring out Netscape, the strongest Web publishers are the search engines, which are all engaged in a fierce battle for brand awareness and dominance. For most of them, advertising is their main source of revenue.

"Their very survival depends on the perception that they're the hot search engine and that will sell them ads and that will keep them going," said Peter Storck, senior analyst at Jupiter and author of the study.

Infoseek and Yahoo! rank closely at Nos. 2 and 3 in revenue for the first half, but the strongest showing may be from Excite, a new player that racked up $3.6 million in ad revenues for a No. 5 ranking.

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