Computer Equipment And Books Lead

  |  August 3, 1999   |  Comments

Computer equipment and books are the heaviest advertisers on the Internet. The top three are Amazon, Barnes & Noble, and Microsoft. Web advertising isn't widely used for building offline brands. Right now, web ads are skewed toward computer early adopters, technophiles, and certain demographic groups. But, as the "late majority" goes online, we'll see fewer Network Solutions ads and more ads for Burger King. And chimichangas.

Computer equipment and books are the most heavily advertised categories on the Internet, according to a study recently conducted by The Strategis Group. The study also found that the top two advertisers online are Amazon and Barnes & Noble, booksellers whose epic slugfest and online omnipresence are well-known. Microsoft is the most visible brand among a host of advertisers in the computer category, and third overall. Credit cards were the third most visible category, as the battle between NextCard Visa and First USA's "e-card" yielded them fourth and sixth place among online advertisers, respectively.

The Strategis Net Presence Survey, part of a larger Advertising on the Internet: 1999 study, surveyed nearly 7,000 banner and button ads from over 700 companies on 50 top sites. Each ad was weighted according to its visibility (home page vs. back page, etc.) and according to the traffic of its site (unique visitors per month). The numbers crunched told a lot about who is advertising on the Internet and about the state of Internet advertising overall. An awful lot.

For example:

  • 10 of the 15 most visible advertisers online are not in the Fortune 500
  • Online advertising is not widely used for building offline brands
  • 13 of the Fortune 25 were completely absent from our survey
  • Online advertising parallels e-commerce

Major Brands Absent

Surprisingly, there were no ads for any oil companies or shoes and no ads for fast food, beer, candy, or cola companies, except for a tiny handful of ads for McDonald's, Budweiser, and Cherry Coke. Leading brands like Wal-Mart, Kellogg's, General Mills, Nabisco, Kraft, Exxon, Mobil, Shell, Burger King, Wendy's, Coke Classic, Pepsi, Nike, and Reebok were completely AWOL from this survey. Major brand equity campaigns of the BASF, du Pont, or GE variety were rare. Oh yes, Priceline was also absent.

According to Strategis' biannual Internet User Trends survey, computer equipment and books are the two top categories for online commerce. The Strategis Net Presence ad survey discovered that computer equipment and books are also the most visible ad categories. Flowers rank about one-zillionth among U.S. industries, but are the sixth most commonly purchased category online and the sixth most advertised category on the Internet. Other top e-commerce categories, such as music and travel, generally show the same pattern.

The clothing category was the only glaring exception. Online clothing sales have risen dramatically in the past year -- coinciding with the near-disappearance of the Internet gender gap -- and now ranks fifth in e-commerce popularity. However, clothing is only 23rd out of 39 categories in Net Presence. So, while there was solid online advertising from Bluefly, Eddie Bauer, J.Crew, and a few others, clothes retailers are largely missing the boat.

Goal is Sales, Not Brand Equity

So, what does all this mean?

The Internet is not at present a major vehicle for building offline brand equity. I agree partly with the marketplace on this one, as online purchasing will always be skewed toward things that are logical to purchase over the Internet -- like books, flowers, software, and CDs -- and away from things not logically purchased over the Internet -- like produce, furniture, and chimichangas.

However, online ads are underused for building brand recognition. Many popular brands are advertised at, say, baseball games, even though the click-through rate is zero for billboards. Regardless of click-throughs, consumer firms can improve brand recognition by simply being seen online. And banners offer leeway for creativity that no right field Sprint billboard ever could.

The Future

What does the future hold?

The advent of media rich advertising and new micro-segmentation capabilities will end this dearth of consumer advertising in a few years. The mainstreaming of audio and video capabilities will provide opportunities for advertisers to play their jingles, use James Earl Jones voiceovers, and graphically display Mexican food -- in other words, to use the same brand-building techniques that work so well on television. With micro-segmentation, maybe P&G will find it profitable to advertise Tide when a cookie senses that a 35-to-44-year-old mother with three or more children is online, for example.

Finally, there's the adoption curve. Right now, advertising is skewed toward computer early adopters, technophiles, and certain demographic groups. When the "late majority" goes online, we'll see fewer Network Solutions ads and more ads for Burger King. And chimichangas.

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Jeff Moore

Jeff Moore is an analyst for Current Analysis, the leading provider of online tactical competitive intelligence for sales and marketing professionals in the IT and communications industries.

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