About AEF | Newsletter | Site Map | Legal | Advanced Search
Print Version

Ads Stay Home for Holidays

On the Internet, as in the real world, the months of November and December would not be complete without a barrage of advertising from companies hoping to separate people from the contents of their wallets.

And this year -- despite the sour state of the economy -- that tradition is holding true.

But in contrast to seasons past, when Net firms battled it out to plaster their logos in as many places as possible, this year companies are taking a more sober approach to self-promotion.

Rather than spending lavishly on TV spots and banner campaigns, a growing portion are advertising within their own companies.

For most, it is a budget-conscious move for economically troubled times.

Perhaps the biggest supporter of in-house advertising is AOL Time Warner. AOL told investors in a recent securities filing that in the first three quarters of the year it had swapped ads worth $96 million between its various divisions.

The company added that it was making it corporate policy to do as much promotion as possible internally, saying it has "redirected, and will continue to redirect where possible, advertising to AOL Time Warner properties."

Such a directive seems especially logical for a sprawling media firm like AOL Time Warner, which has plenty of things to advertise, such as AOL Internet service or the Harry Potter movie, and plenty of places to put the ads.

But analysts say it's not just the 300-pound gorillas of the media business that are taking such an approach.

"It's a trend right now in media companies for them to advertise only on their in-house properties. It's a huge way for them to save and yet still promote themselves," said Denise Garcia, media research director at GartnerG2.

The practice extends to online retailers and ISPs, which are using their own pages to drum up sales for a partner or parent company that is expected to do the same in return.

A case in point this season is Amazon.com. Although the site is doing plenty of seasonal advertising, it's promoting itself largely on sites of companies that are already its partners -- like Target, Toys R Us, AOL Time Warner and Drugstore.com.

To cut costs, some websites are opting not to promote themselves at all outside the company.

One such example is Kmart-owned retail site BlueLight.com, which ran an expensive advertising campaign over the holidays last year.

This year, however, BlueLight said it won't be spending on independent advertising. Instead, its plans include promoting the site in Kmart's regular ads, and using banners and kiosks at the chain store to spur traffic.

Other sites are using space on their main pages to promote a parent company. On the Microsoft-owned Internet service provider MSN, for example, the centerpiece advertisement is for Microsoft Windows XP.

Although it's certainly nothing new for companies to use their own websites to tout their own products, the downturn in advertising sales this year is making the practice more prevalent.

Even though ad spending is up this quarter compared with earlier this year, sales are still down significantly from pre-dot-com meltdown levels. Sales of banner ads -- once the dominant form of online promotion -- have taken a particular beating as advertisers opt for larger displays or pop-up browser pages.

That's leaving many websites and publishers with a lot of empty space on their hands. And increasingly, they're filling it with promotional messages of their own.


Joanna Glasner, Wired News. November 21, 2001

Copyright © 1994-2001 Wired Digital Inc.. All rights reserved.