Tech advertising
no longer dominates the web

Growth in consumer messages

By Jeremy Schlosberg

 

       Are techies loosening their lead in web advertising?
So it seems. In 1998, for the first time technology-based advertising represented less than half of overall web advertising expenditures, according to a study by InterMedia Advertising Solutions (IAS).
     Computers and software still account for 44.7 percent of the $1.03 billion spent last year on web ads.  But expenditures by tech companies grew at a much more modest rate--63.6 percent--than ad expenditures by a slew of other industries.
     Web advertising by companies hawking medicines and proprietary remedies grew 387 percent in 1998, rising to nearly $8 million. Other segments showing significant growth were governments and organizations, 329 percent; building materials, equipment and fixtures, 274 percent; and retail, 236 percent.
     IAS also reports that internet advertising represented 1.29 percent of overall ad spending in 1998, up from .74 percent 1997, for an increase of 74 percent.
     Of the top 10 web advertisers in 1998, three were non-tech companies. General Motors ranked No. 4, up from No. 9 in 1997; Barnes & Noble was No. 9, up from No. 42; and Datek Securities was No.10, up from No.30. In the previous year only one non-tech company, GM, made the list.
     IAS president Joe Philport believes that the trends seen in 1998 mark the beginning of what he calls the third wave of web advertising. First came the high-tech companies, then the e-commerce retailers and service providers, and finally we’re seeing the emergence of ads promoting consumer products and services.
     Among the more slowly growing segments is media and advertising. Media companies and advertising firms spent a total of $51.6 million on web ads in 1998, up less than 5 percent over 1997.
     The IAS figure of $1.09 billion in total web advertising spending in 1998 is one of many floating around this year. According to eMarketer, which specializes in collecting such data, Simba Information Services places the figure at $976 million, Forrester Research checks in at $1.3 billion, and Jupiter Communications, aligning with the Internet Advertising Bureau, asserts that $1.9 billion was spent on web advertising last year.

1998 Top Web Advertisers by Growth

Industry Expenditure Growth rate
1. Medicine & proprietary remedies $ 7.99 million 386.52 %
2. Government & organizations 12.89 million 328.66
3. Building materials, equipment & fixtures 2.65 million 274.02
4. Retail 35.86 million 235.64
5. Department stores 2.58 million 226.50
6. Schools, camps & seminars 12.95 million 219.28
7. Direct response companies 74.29 million 214.54
8. Misc. merchandise 3.45 million 192.44
9. Local services & amusements 51.32 million 179.16
10. Personal hygiene & health 3.21 million 145.99

[source: InterMedia Advertising Solutions]

growth rate equals the percentage increase of advertising expenditures in 1998 over 1997

 

1998 Top Web Advertisers

Advertiser Total expenditure Growth rate
1. Microsoft $ 34.86 million 9.4 %
2. IBM 28.52 million 58.6
3. Compaq 16.20 million 169.8
4. General Motors 12.70 million 84.8
5. Excite 12.35 million 1.5
6. Infoseek 9.31 million 22.3
7. AT&T 9.29 million 43.5
8. Hewlett-Packard 8.09 million 102.9
9. Barnes & Noble 7.61 million 280.2
10. Datek Securities 7.60 million 202.0

[source: InterMedia Advertising Solutions]

 

1998 Top Ten Industries by Web Advertising Expenditure

Industry Total expenditure
1. Computers & software $ 461.83 million
2. Financial 92.84 million
3. Direct response companies 74.29 million
4. Local services & amusements 52.32 million
5. Media & advertising 51.57 million
6. Automotive and automotive accessories & equipment 47.85 million
7. Retail 35.86 million
8. Public transportation, hotels & resorts 31.60 million
9. Telecommunications 31.16 million
10. Business & technology 18.12 million

 

- Jeremy Schlosberg is Media Life's senior editor for new media.