Slow 2002 recovery for web ad spending

'This will be the year that people finally realize that the internet is completely mainstream and is just another channel, not some sort of odd, weird thing that we need to treat any
differently.'

Slow 2002 recovery
for web ad spending

Expect lift as economy revives from very grim '01

By Marty Beard

    Two weeks into the new year, only one thing is clear about online advertising spending for 2002: Coming off 2001, it can only improve.
     It would be hard not to, with online ad spending off 17.1 percent for the first three quarters of 2001 amid an overall ad decline the nation hasn't seen since World War II or the Depression, depending on who's talking.
    How much better is the question. The answer: not that much.
"It’s probably going to be a little better because it’s hard to get any worse," says Richard Roth, an interactive media planner at Abelson-Taylor. "I’m hoping that the economy will pick up and that will have some impact."
    Jarvis Coffin, CEO of ad network Burst Media, agrees.
    "It will be a better year than last year, but let me qualify that," Coffin says. "On a dollar for dollar basis, an ad-sales basis, we don’t anticipate much growth in 2002."
   There are a couple of causes for optimism.
     First, the overall economy is expected to begin improving, some economists think as early as March, bringing the country out of a year-long recession.
     Second, many believe 2002 will be the year marketers finally accept the internet as a mainstream medium, one offering strengths the others lack, as a combination of television, library, post office, catalog, and telephone all rolled into one.
     "This will be the year that people finally realize that the internet is completely mainstream and is just another channel, not some sort of odd, weird thing that we need to treat any differently," says Sean Carton, managing partner at Carton D’Onofrio Partners in Baltimore.
    Also working in the internet's favor is that it is becoming increasingly entrenched in the way people work and live. A recent study from the Online Publishers Association shows that among at-work internet users the internet is the No. 1 medium during the daytime.
     "A lot of the emotion and a lot of the anxiety of the internet economy has been wrung out of it," Coffin says. "We were still trying to live up to the hype a year ago at this time, making explanations all year long about the internet versus the hype."
     At the same time, there's mounting evidence of the internet’s effectiveness as an advertising medium, especially for branding.
    Still, a lot more research is needed before marketers are persuaded.
     "The burden of demonstrating ROI is still relentless," says Abelson-Taylor’s Roth. "It has to change. I would like to see some truly--and I mean truly--independent research conducted that can help agencies sell the value of interactive media to their clients."
     In the meantime, users can expect to be exposed to more and more intrusive forms of advertising.
     "We will continue to see increased use of rich media vehicles like the Superstitial and Eyeblaster, while Flash will increasingly start to displace animated gifs for brand- and awareness-driven advertisers," says Jerry Quinn, vice president and media director in the San Francisco office of Agency.com’s I-traffic.
    "This is where the publishers will find some 'profit-margin hope,' in that these brand-oriented campaigns will specifically desire the higher margins of targeted, unique and rich inventory opportunities that are under-valued by the direct marketers."
    Spending on internet direct marketing and on rich media likely will grow this year, Quinn says.
     "This year will likely be a very strong year again for online direct marketers. This is mostly good news for those online advertisers and agencies that can track the performance of their online programs and immediately determine whether a particular marketing vehicle is contributing positively to the bottom line."
    Just when online ad spending begins to pick up is another matter.
    "Overall I think it’s going to basically suck for the first half of the year and start improving after that," says Carton.
    "But what I think is very encouraging is the showing that online shopping had this Christmas. It might get people to start thinking about doing stuff online again.
    "Generally I think that, unless you’re in the military contracting industry or the intelligence industry these days, things probably will suck for the next six months or so."

-Marty Beard is a staff writer for Media Life.

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