Report: More of Fortune 500 Advertised Online in Q4

Slowly but surely, traditional advertisers have taken to the Internet for ad campaigns, according to Neilsen//NetRatings’ AdRelevance unit.

In the fourth quarter, AdRelevance found that 286 of Fortune 500 companies ran at least one online ad campaign, a 6 percent increase from a year ago. Amazon.com remained the top online advertiser, serving 12.2 billion impressions in the quarter. Estee Lauder finished second with 9.5 billion ad impressions, mostly through its partnership in Gloss.com.

“The bottom line is that all the bases appear to be covered for online advertising to come out of the challenging times it’s experienced over the last two and a half years,” said Charlie Buchwalter, vice president of client analytics at Nielsen//NetRatings. “We can say with a lot of confidence, with 284 of the Fortune 500 doing some form of online advertising, there’s no question that these companies are experimenting and finding ways to put online in the media mix. It augurs for a strong 2003.”

A host of technology and communications firms joined Amazon and Estee Lauder in the top 10. USA Interactive, which owns a number of Internet-related businesses like Expedia and Hotels.com, came in No. 3 with 7 billion impressions. SBC Communications, which co-markets a DSL service with Yahoo, followed with 6 million. Barnes & Noble, the second most-active online advertiser in the previous year’s fourth quarter, rounded out the top five with 5.8 billion ad impressions. The rest of the top 10 included computer makers Dell and Hewlett-Packard; Bank One; AOL Time Warner; and General Motors.

The figures also showed the Internet advertising’s continuing challenge: the under-representation of major advertising sectors like automotive, pharmaceuticals and consumer goods. While GM made the list, fellow car companies Ford and Daimler Chrysler were not on the list. Those two companies spent a combined $4.4 billion on advertising and marketing in 2002 according to figures compiled by Ad Age. In fact, AdRelevance found that GM and Honda made up more than half of all ad impressions from the sector. Likewise, consumer goods giants, such as Proctor & Gamble, Pepsi and Unilever, were also missing from the list of top advertisers. Pharmaceutical companies are also nowhere to be found, despite Pfizer, Johnson & Johnson and Merck spending nearly $5 billion combined on marketing in 2002, according to Ad Age.

Attracting traditional advertisers to the online medium has long been earmarked as a key to growth. With better targeting and more verifiable gauges of campaign effectiveness, Web publishers hope to increase their share of the marketing pie from the current 2 percent.

Additionally, the growth of rich media formats has been tabbed as a way to lure more companies to market online. According to the latest ad-serving trend report from DoubleClick, rich media use grew 43 percent in the fourth quarter of 2002 compared to a year earlier. The ad-serving firm forecasts a further 10 percent sequential growth in the first quarter of 2003.

AdRelevance data showed the top users of rich media to be the largest of traditional advertisers. While Amazon barely squeaked onto the Fortune 500 list at 492, the top rich media advertiser, HP, ranked No. 28. Following HP, which served 3.1 billion impressions, were other top companies: SBC and Microsoft.

“It’s really interesting that the lion’s share of the people [using rich media] are the largest traditional advertisers,” Buchwalter said. “The reason that rich media is an important story is it appears to be the catalyst that’s encouraging large, traditional advertisers that were standing on the sidelines” to try the medium.

He said rich media, which carries higher CPMs than static ads, could help boost the declining rates Web publishers have been able to charge over the past two years.

Another possible positive trend Buchwalter noted was the decline in house ads. Compared to last year’s fourth quarter, house ads fell from 30 percent of impressions to 27 percent.

“It’s just one more indication, we think, that people are able to get real money for their ad inventory,” he said.

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