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Online Shift in Advertising

In another sign of the growing importance that bricks-and-mortar companies are playing online, traditional advertisers in March for the first time accounted for more than half of the top 100 Internet advertisers, according to Nielsen/NetRatings.

Mainstream advertisers also spent more for online ads ($123.3 million) than digital companies ($104.8 million) during March, according to results of the Nielsen/NetRatings survey to be released during the Ad:Tech trade show that opens today at the Los Angeles Convention Center.

"For the first time, we see a changing of the guards in the world of online advertising," said NetRatings Vice President Allen Weiner. "The shift really began last year in the fourth quarter, and it's continued through March."

Advertisers also face a backlash among consumers who have grown tired of viewing the same ads over and over, according to NetRatings. The worst sector: Online companies, which risk "ad fatigue" among consumers. Traditional companies do slightly better, but high-tech companies generally aren't introducing enough ads to help boost click-through rates.

NetRatings' research underscores what's been painfully evident to many advertising-dependent Web site operators.

Ad revenue growth began to slow during 2000 as Web sites began to run short of cash. WebMergers.com, which tracks the online industry, reported Tuesday that 55 Internet companies closed in April. The uptick in online failures, which followed a drop-off in closings during March, pushed the total number of failed Internet companies to 435 since January 2000.

Not surprisingly, the Ad:Tech conference running through Friday will highlight online advertising strategies that have succeeded. "Since we're such a young industry, the focus in past shows was on new technology, the next 'killer ap,' " said Jason Hester, Ad:Tech's content director. "This show will focus on proven strategies."

Keynote addresses will be delivered by CNet Chairman Shelby Bonnie and Richy Glassberg, vice chairman of the renamed Interactive Advertising Bureau, an industry trade group. Both speakers are expected to underscore online advertising's role in the broader ad industry.

"One of the points Richy will make is that this isn't just a downturn in Internet advertising. It's a downturn in the overall advertising industry," Hester said.

Big Spenders

Mainstream advertisers accounted for more than half of the top 100 Internet ad buyers, spending more for online ads than digital companies during March, according to a new survey.

Advertising dollars in millions:

  • High-tech: $51.4
  • Dot-com: $104.8
  • Traditional: $123.3
  • Source: Nielsen/NetRatings


Greg Johnson, The Los Angeles Times. May 2, 2001

Copyright © 2001 Los Angeles Times. All rights reserved.