Report: Non-Tech Ad Spending On the Rise

Although computers and software (including online services) continued to be the top spending category in Internet advertising in 1998, the fastest growing segments are medicines, government and retail, according to a newly released study.

The report from InterMedia Advertising Solutions (IAS), put computer and software advertising for 1998 at $461.8 million, about 44.7 percent of total ad spending on the Web, down from 50.5 percent in 1997.

The most dramatic growth, far outpacing the overall increase of 89.8 percent, was seen in medicines (up 386.5%), government and organizations (up 328.7%), retail (up 235.6%), direct response companies (up 214.5%), transportation, hotels and resorts (up 135%), and financial (up 128.5%), according to the report. In contrast, the increase in computers and software was only 63.6 percent.

Significant gains in the share of total dollars spent on the Web were seen in the financial industry at 8.9 percent (up from 7.7%), direct response companies at 7.2 percent (up from 3.8%) and retail at 3.5 percent (up from 3%), while overall Web ad spending soared to an estimated $1.03 billion in 1998, the report said.

That latter figure is substantially less than the Internet Advertising Bureau’s estimate of nearly $2 billion in ad spending last year, but the IAB figures include all Internet spending, not just the Web. The IAB survey includes data concerning online advertising revenues from Web sites, commercial online services, free email providers and all other companies selling online advertising.

The information is contained in IAS’ full year InterWatch report, a study that tracks more than 400 industries.

“We are definitely seeing more and more industries make ever stronger commitments to the Internet,” said Joe Philport, president of IAS. “It has become increasingly evident in the past year that many non-tech industries are looking to this medium as an essential vehicle to execute their marketing goals.”

InterWatch also monitors Internet spending as part of overall advertising expenditures. The Internet now represents 1.29 percent of overall ad budgets compared to the .74 percent in 1997. However, certain industries have aggressively incorporated it into their overall advertising campaigns. Computers and software are spending 15.9 percent of ad budgets on the Internet, business and technology are at 9.1 percent and direct response companies at 3.1 percent.

Microsoft remained the leading spender in 1998 at $34.9 million (up 9.4 %) followed closely by IBM at $28.5 million (up 58.6%).

InterMedia Advertising Solutions provides studies on advertising occurrences and expenditures on the Internet. The information is delivered using the industry standards developed by IAS’ sister company, Competitive Media Reporting (CMR). CMR and IAS are VNU Marketing Information Services Companies.

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