More NewsCMR: Web Ad Spending Dropped 14.7 Percent in 2001

CMR: Web Ad Spending Dropped 14.7 Percent in 2001

Yet guarded optimism continues for the coming year.

There’s a number to quantify the online ad sector’s woes during the past year, and it’s 14.7 percent — the industry’s total drop in ad spending from 2000, according to researcher CMRi, a unit of Taylor Nelson Sofres.

New York-based CMRi said that Internet ad spending for 2001 totaled $2.5 billion, down from $2.87 billion the previous year.

Top spenders during the year were eBay and General Motors, which spent about $45.1 million and $43.3 million, respectively, according to CMRi’s figures. Providian Corp. and Amazon.com followed, with $29.3 million and $27.5 million, respectively.

Other leading advertisers included BarnesandNoble.com, Bank One Corp., AOL Time Warner, Classmates Online, Vivendi Universal, and Dell Computer.

Not surprisingly, retail proved the highest-spending industry, shelling out $533.3 million during the year. Spending by media and advertising companies followed closely behind, with $450.5 million. Financial services firms came in third in spending, with $326.2 million.

According to CMRi, Web portal Yahoo brought in the most money of any single online media outlet, raking in an estimated $344 million during the year. AOL Time Warner’s America Online unit and Excite followed, with $320 million and $127 million, respectively.

Yahoo and AOL’s chief rival for page views, Microsoft’s MSN, took in only $33.6 million, CMRi said.

It’s worth noting that the media firms themselves routinely dispute such figures provided by third parties. MSN, for instance, has said in recent quarters that it’s brought in more ad revenue than Yahoo, though Microsoft has yet to break out numbers for the unit.

The findings serve as a grim reminder of last year’s hardships, relevant especially in light of recent reports of guarded optimism by some in the media business, who expect an overall advertising rebound later this year. As the thinking goes, 2001 proved to be so bad that 2002 is almost guaranteed to be an improvement.

While CMR’s business lies in tracking advertisements rather than making predictions, the market researcher, too, is quick to jump on the bandwagon.

“With the year 2002 already showing some signs of improvement, we’re expecting to see an upswing in spending by third quarter,” said CMR president and chief executive David Peeler. “In fact, CMR estimates that Internet spending will lead the way in 2002, in terms of significant growth, up 8.8 percent from its 2001 total. With subtle signs of recovery on the horizon, the industry awaits the economy’s stabilization, and then we’re hopeful to see advertising revenues reach more positive levels.”

Still, most major online media and advertising companies remain wary of such predictions. DoubleClick, for instance, said in January that that it anticipates lower first-quarter revenue and wider pro forma losses, from the fourth quarter of 2001. For the full year, DoubleClick projected revenues roughly flat with 2001.

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