Most categories are way up but a few are off

By Dave Lindorff

      Dot.com advertising really took off at the end of the year, with the amounts spent in November and December each totaling more than the amount spent during the entire first 10 months of the year.
     But looking more closely at the record $3.2 billion spent by the dot.coms this past year, there are a number of interesting and surprising phenomena, says Jane Beresford, research director at Creative Media.
    For one thing, while some categories like computer components and finance and mortgage companies saw spending leap by 59,000 and 36,000 percent, others like computer networking and magazines saw spending go up by a comparatively paltry 48 and 76 percent.
   One category--business, personal and residential phone services--actually spent 32 percent less in 1999 than in 1998. It was the only category where spending went down last year.
    "I'm not sure why their spending dropped," says Beresford. "I know I still get plenty of their direct mail messages and phone solicitations, so I suspect that they've shifted into other media and marketing methods which weren't measured here."
     Two of the categories showing enormous spending increases were pet stores and banks and savings and loan institutions. Although their spending in 1998 was negligible, these two categories leapt into 15th and 16th place in the ad spending rankings, with on-line pet stores spending $40.5 million and banks and S&Ls spending $38.6 million this past year.
    Everyone knows now about these on-line pet stores," says Beresford, "which shows that if you need to make a big splash with things like ads in the Super Bowl, you can do it."
    Beresford says that seasonality is particularly pronounced for the dot.com industry--particularly in the case of e-commerce firms.
      "They seem to be even more seasonal than brick-and-mortar stores are," says Beresford, reflecting on an analysis of data provided by Competitive Media Reporting (See link below for her report.)
    Dot.com spending, she notes, went from $188.7 million in August to $275.6 million in September, and then shot up to $484.1 million in October, and $686.9 million in November, before dropping back to $631.6 million in December.
    "I expect we'll see dot.com spending falling some or leveling off now until late summer," predicts Beresford. "Then I think we'll see it shoot up even higher in the fourth quarter of this year."
   The top advertising spenders in 1999 among the online companies were: online and internet services, which spent $610.7 million in 1999, up 205 percent; investment brokers, which spent $482.6 million, up 504 percent, and publishing and media, which spent 383.5 million, up 707 percent.
   Behind these three were toy, sport and hobby stores, which spent $122.8 million on advertising in 1999, up 3590 percent, and card, gift and book stores, which spent $115.8 million, up 211 percent from 1998.

Beresford dot.com spending report

- Dave Lindorff  is a staff writer for Media Life.