Study: Online Advertising Still Dominated by Dot-Coms

Larger, more established companies are increasing their online ad spend, but Web advertising is still dominated by small and mid-sized dot-coms, according to a new study by Jupiter Media Metrix’s AdRelevance unit.

Large companies — with quarterly sales of $500 million or more — increased their weekly online ad impressions by 17 percent during the fourth quarter of 2000, to 37 million. They also purchased an average of 135 million impressions during the quarter.

But that’s fewer than the 176 million impressions bought by the smallest dot-coms, categorized as pure-plays with quarterly sales of $75 million or less.

According to the study, dot-com companies of all sizes bought more impressions than traditional companies of equal size. Differences between mid-sized dot-com and traditional advertisers were the most drastic, with dot-coms buying an average of 453 million impressions during the quarter, while traditional companies bought 117 million.

Additionally, the most impressions were purchased by a dot-com, Amazon.com, which bought 6.2 billion during the quarter. Microsoft came next with 4.1 billion impressions, followed by MSN (3.2 billion) and AOL Time Warner (2.6 billion).

Much of the findings are understandable, since pure-play dot-coms by their nature often focus on computer-, Internet-, or technology-based products and services. Even if they aren’t selling technology products, their customers are Internet users, so Web advertising is a good way to reach them.

“Dot-coms have been guiding the online ad industry since its inception and the mid-size dot-coms, whose customers are online, are continuing to lead,” Charlie Buchwalter, vice president of media research at AdRelevance.

But while the growth in overall impressions and spend breadth by traditional advertisers are favorable trends for ad revenue-supported Web publishers and marketing companies, the study still suggests that traditional clients are taking their time to transition part of their marketing budgets online.

“Market-weary sites have been hoping for the larger, big budget advertisers to jump into the deep-end of the online advertising pool, but the latest AdRelevance data indicate only a gradual increase in online advertising from large companies,” Buchwalter said.