ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, August 18, 1996 TAG: 9608160020
SECTION: BUSINESS PAGE: 1 EDITION: METRO
COLUMN: ADVERTISING
SOURCE: MEGAN SCHNABEL
MEMO: ***CORRECTION***
Published correction ran on August 18, 1996.
A company name is misspelled in today's Business section, which was
preprinted. The company's name is c/net Inc.
Here's some Internet news for recently reconnected America Online customers - victims of that recent 18-hour blackout - to think about while waiting for your 32-cent rebates to arrive:
WebTrack, an Internet news and database service, recently updated its list of the top spending Internet advertisers.
According to WebTrack, spending on Internet advertising increased 110 percent between the last quarter of 1995 and the first three months of 1996, when companies spent $26 million pitching themselves and their products on the World Wide Web. Compare that to 1995, when Web advertising for the entire year was just $30 million to $40 million.
The Internet advertising got off the ground two years ago, when advertisers first started buying banner ads - those long, narrow promo boxes - from Web publishers including Infoseek, Yahoo and Netscape.
As you might expect, the top spenders are involved in communications. Here, according to WebTrack, are the five top-spending Web advertisers and their on-line expenditures:
IBM: $1.5 million
Microsoft: $1.0 million
Netscape Communications: $929,000
cnet Inc.: $612,300
AT&T: $606,700
These figures include payment by advertisers for banner ads on - and links to - other Web sites. It doesn't factor in the money they spent hiring advertising consultants and computer gurus to design Web sites flashy and gimmicky enough to stand out in the noise of the Internet.
But compared to television or magazine advertising, the Web is a bargain. ``The dollars it takes to advertise on the Internet are extremely cheap compared to other methods,'' said Matt McAllister, an assistant professor in the communications studies department at Virginia Tech.
Most Internet advertisers are national companies for whom the Internet is just a small part of their overall advertising plan. Compare their on-line spending with their total annual advertising budgets: IBM spent $257.9 million advertising computers; Microsoft shelled out $147.7 million to hawk software; AT&T spent $673.4 million selling long-distance service.
``A lot of early customers and users really resented the commercial presence on the Internet,'' McAllister said. ``You want the service, you've got to put up with the advertising. I think it's not going to be long before the Internet hits the plateau that commercialism is just part and parcel of it.''
As with any advertising, it's tough, if not impossible, to know just how much of an impact those on-line billboards have. For one thing, Web- and computer-related businesses and telecommunications companies - which many Net users are sure to appreciate - dominate Internet advertising. In the first three months of 1996, those three categories accounted for 72 percent of all Web advertising, according to WebTrack. Saturn was the only Top 10 advertiser that wasn't a Web-related company.
Internet advertising ``probably right now tends to preach to the converted,'' said McAllister, who has written about advertising and changing technologies. ``But we're at the point now where advertisers believe that people use the Internet to make decisions.''
Tony Weasler, a programmer at Internet Business Technologies, a Blacksburg company that helps businesses set up Web pages, said online advertising is becoming popular among low-tech companies in Southwest Virginia, especially real estate brokers and restaurants.
``What we try to tell our clients is the Internet is a way for you to get information out to clients very, very cheaply,'' he said. IBT clients typically pay a one-time $400 to $700 set-up fee, then $20 or so a month for Web page maintenance, he said.
Successful Internet advertising does require a degree of customer participation not found in other media. ``In television, the ad comes to you,'' McAllister said. ``On the Internet, you have to make an active choice to go to that ad.''
The explosion in Internet advertising follows the explosion in Internet use. And the key issue affecting the development of the Web as a commercial forum, says the WebTrack study, is whether it can become a genuine mass medium, appealing to more people than ``Webbies'' alone.
The latest Internet use tally, from a survey conducted in May and June by IntelliQuest Worldwide Internet/Online Tracking Service, reports that:
35 million of 265.5 million Americans had used the Internet or an on-line service in the past three months.
19.9 million use the Internet or an on-line service more than two hours a week.
13.8 million use the Net or an on-line service five hours or more a week.
9 million began to use on-line services for the first time in 1996.
LENGTH: Long : 101 linesby CNB