After Slow Start, Online Advertising Is Gaining Converts By SLAV KANDYBA Staff Reporter As more and more businesses opt to advertise their services online, several San Fernando Valley firms that facilitate the placement of the ads are seeing their businesses boom. After a number of years testing the waters, these ad agencies specializing in Internet related marketing say their clients are increasing their spending in the medium, in some cases contributing to double and even triple digit billings increases for the agencies. “People were experimenting with it when it first came out,” said Leslie Poliak, vice president of West Coast operations at KSL Media. “Because online can be tracked, there are so many possibilities that it opened for people online.” In the first quarter of this year, new Internet advertising placements drove the total amount spent on Internet advertising to record highs. Online ad revenues hit $2.3 billion total, a 39 percent increase over the first quarter of 2003, according to the Ad Revenue Report by the Interactive Advertising Bureau and PricewaterhouseCoopers. Another study conducted by the Nielsen/NetRatings found that the boost in ad spending was led by a growing number of brick and mortar companies, rather than those that market exclusively online. Burbank-based marketing firm KSL Media experienced a double-digit, “possibly triple digit” windfall thanks to growth of online advertising, Poliak said, an increase she attributed to one of the main features of Internet advertising the ability to track the number of people who saw your ad. Tracking ability is key Tracking has helped online advertising to compete with conventional advertising on TV and in print, Poliak said. “You’re putting a TV ad on the air so you’re not quite sure of the effect it may have had,” she added. “You don’t really know the degree it’s had, whereas with online you know immediately.” Tracking viewership is one tool companies can use to show specific results for their advertising expenditures and, unlike television rating systems, which deliver results over longer periods, Internet advertising results are available immediately. They want “immediate results,” Poliak said. Internet advertising is very similar in growth and popularity to cable television, which emerged some 25 years ago. “When cable first came out, media planners were planning to give 10 percent,” of their spending over to the medium, Poliak said. “Now cable is a frontrunner.” Public relations and marketing firm TaylorMade Marketing sees Internet advertising catching on to a greater degree as well. The company is not placing ads online but as a design center, it has many requests to design Web site banners, said Scott Taylor, the firm’s president. Taylor said he heard it’s one of the “fastest growing fields.” KSL’s Poliak concurred, saying “online advertising is increasing faster than any other medium. “Last year’s increase was the largest, most significant,” she said. At Encino-based Inter/Media Advertising, a media buying and advertising firm with billings of more than $250 million in 2003, clients are also spending more on Internet ads. President Bob Yallen said about six percent of sales are attributed to Internet, a relatively small number on the surface but meaningful in context: “We’re seeing that grow, every year that number is getting bigger,” Yallen said. Yallen said he was not convinced Internet advertising makes sense as a single strategy. “I believe Internet advertising needs to be a part of a fully-integrated advertising execution,” Yallen said. He differentiated between direct marketing strategies that require the viewer to act, versus such tactics as banner ads, that just promote the brand name. Most Internet users are inclined to click off an ad that pops up on the screen to advertise a product, he said. Auto industry goes online One business sector that has increased its use of on online ads is the automotive industry, advertisers said. Internet spending among auto makers went up 90 percent to $57 million in the first quarter of 2003, compared to $27 million in the same quarter last year, Yallen said, quoting Nielsen/NetRatings statistics. The spending is a mere drop in the bucket compared to what the auto industry spends on other media, but the increase is significant, some say. “This gives you an idea that there are many, many industries that are embracing Internet advertising campaigns,” Yallen said. KSL’s Poliak also indicated the future looks bright for Internet advertising. “As more and more people become wired, and banking and shopping are done online, (that is) creating a huge opportunity for advertising, because you have more and more eyeballs,” Poliak said.
After Slow Start, Online Advertising Is Gaining Converts