Despite the acceptance of the web as a communications and information medium by an increasingly mainstream audience, the country’s biggest non-dot.com advertisers are keeping the web at arm’s length.
    Divide the companies advertising on the web into three groups—small, medium and large—and it’s the small companies that continue to place the biggest number of impressions online, according to a new report from AdRelevance.
    The median number of ad impressions purchased during the fourth quarter of 2000 by small companies was 167 million, ahead of the 160 million purchased by midsize companies and the 135 million purchased by large companies.
   To ad-supported web sites in financial trouble, this reality comes as salt in the wound of their current revenue woes.
    "When the bottom fell out of the dot.com market last spring, there were a number of analysts who felt sure that the larger companies were going to rush in to fill in the gap," says Charles Buchwalter, vice president of media research for AdRelevance, which is owned by internet measurement and analysis firm Jupiter Media Metrix.
      But the big companies aren’t rushing anywhere.
    "While more large companies are extending their market portfolios to include online, a number of them are still somewhat on the sidelines," says Buchwalter.
   That’s not to say they won’t end up spending a lot on new media. One good sign for ad-starved web sites is that when large companies do advertise online, they tend to spend far more per web site than smaller companies.
    In the fourth quarter of 2000, the media ad spend per site by large companies was $56,000, compared to $26,000 for small companies and $17,000 for midsize companies, according to AdRelevance.
    Plus, large companies already tend to buy a wider range of sites than smaller companies. The median number of sites purchased in the fourth quarter of 2000 by large companies was 72, compared to 57 for small companies and 50 for midsize companies.
    So large companies are out there but they’re holding back. They see no need to hurry. The current environment has proven to them once and for all that the idea that businesses have to think and respond in so-called internet time was an illusion.
   "I think what you have now are these larger companies—companies that have built brands offline—asking themselves the question, ‘Okay, do I believe it’s possible to build brands in the online world?’" says Buchwalter. "And more and more are seeing evidence that it makes sense to do this. But they’re in the process of figuring out what part of their portfolio should go to the web."
   A small company as defined by AdRelevance is a company with quarterly sales of $75 million or less. Midsize companies are defined as companies with quarterly sales between $75 million and $500 million, while large companies have quarterly sales above $500 million.
   When the data is further dissected, one group in particular emerges as by far the most active type of web advertiser—the midsize dot.com.
   During the fourth quarter of 2000, the median number of impressions purchased by midsize dot.coms was 453 million.
    This number was well over double the median number of impressions purchased by the second most active group of advertisers, the small dot.coms (see chart).
   All sizes of dot.coms were more active online advertisers than any size traditional company.
    Among traditional companies, the largest rather than the smallest are the most active online.
   "It’s always the large companies that set the standard of trying new things," says Buchwalter. "So when you see more small to medium companies that are traditional getting into the fray, then that will be more of an indication that there’s some wind behind the sail."

-Jeremy Schlosberg is the senior editor for new media.

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