ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Sunday, January 5, 1997 TAG: 9701070007
SECTION: BUSINESS PAGE: 4 EDITION: METRO
TYPE: ECONOMIC FORECAST
SOURCE: MEGAN SCHNABEL STAFF WRITER
The advertising industry isn't facing any earth-shaking changes in 1997, ad watchers say, but that doesn't mean agencies or their clients can sit back and relax.
"Nothing's really changed, except it's intensified," said Bill Thomasson, executive vice president of The Packett Group in Roanoke.
The majority of the agency's clients are spending about the same amount as they did last year - or even a little less, he said. And that's making competition in the ad industry fiercer and is forcing agencies to be more creative.
"They're saying to us, `You have to help us be smarter, faster, more efficient,''' Thomasson said. "Justifying that dollar expenditure is getting harder. You're going to have to work harder to get the same dollars you did last year."
Most clients no longer can afford to saturate the marketplace with ads for their goods and services, he said. Instead, they're turning to more targeted marketing campaigns - and are relying less on traditional media such as television and newspapers.
Matt McAllister, an assistant professor in Virginia Tech's communications studies department, said advertisers who must do more with less money are increasingly looking for alternative media that can reach specific audiences: sports arenas, doctors' offices, schools and, perhaps the largest growth area, the Internet.
The Internet as an advertising medium is going through a phase of infancy, he said, similar to what television, and then cable TV, experienced years ago. As a result, many potential advertisers and agencies remain wary of the new medium.
Rightfully so, said Thomasson. "Even the most astute people would have to say they haven't a real clue about its impact," he said.
But as more studies of Internet effectiveness are published and as it becomes more intertwined with other media choices - MSNBC, for instance, or on-line newspapers - on-line advertising will continue to gain acceptance, McAllister said.
And as advertisers strapped for cash seek to narrow their campaigns to reach target audiences, interactive media such as the Internet and pay-per-view television will become popular choices, McAllister predicted.
Today, companies purchase mailing lists and keep track of catalog purchases to build customer profiles. With those aids they can tailor their marketing to demographic groups.
"Interactive media increases that option even more," he said. Whenever someone logs onto the Internet, his movements through Web sites and on-line ads are, theoretically, traceable. If a user clicks on an ad for a long-distance service, that can be recorded. If he visits three fishing-related sites, it, too, that can be noted and logged. Using such data, advertisers will be able to build detailed profiles of individual consumers, he said, rather than just large demographic groups.
All that is still in the future. The technology to record a user's every mouse click hasn't been perfected yet, and simply measuring the number of "hits," or visits, a Web page receives is relatively meaningless.
Until tracking becomes more sophisticated, Thomasson said, most advertisers shouldn't pour the majority of their ad budgets into on-line promotions.
But ad agencies can't let themselves be caught unprepared when the technology is finally ready, he said. Packett has been offering more Internet services and will continue to expand its on-line expertise, he said.
"If you're still doing business this year the way you did it last year, you'd better watch out," he said.
LENGTH: Medium: 69 linesby CNB