Web Ad Budgets: Bigger Slice of a Smaller Pie

Although the tragic events of Sept. 11 may have an as-yet-unknown long-term effect on the world of Internet advertising — for better or worse — a study by the CyberAtlas Research division of INT Media Group concludes that, in the first two quarters of 2001, the medium had slowly been coming into its own.

INT Media Group, is also the parent company of the internet.com network, which includes this site. The CyberAtlas Research report, “Internet Advertising: Where Are We Now?“, came up with its sample of 235 qualified respondents by surveying visitors at sister sites Internet Advertising Report and ClickZ. Two-thirds of those surveyed hold executive, senior or middle management titles, 62 percent hail from the United States, and nearly half work at operations with fewer than 50 employees.

Interestingly, contrary to what we’ve been seeing elsewhere, CyberAtlas found that more respondents (38 percent) had seen their ad budgets increase from last year to this year, than saw their ad budgets decrease (31 percent).

The study also looked at the media mix that respondents were using for their marketing efforts. Radio and television seem to be of limited importance for survey participants, perhaps because most work for small businesses. A full 54 percent of those surveyed said they didn’t spend even one cent of their ad budgets on broadcast media. Forty-one percent said they spent 40 percent or less of their ad budget on broadcasting, and only 5 percent said they spent 50 percent or more on radio or television.

Direct mail, too, failed to grab a significant part of respondents’ ad budgets. Forty-five percent said they spent less than five percent (or none) of their ad budget on direct mail. Print did a little bit better, with 31 percent of those surveyed spending between 30 percent and 50 percent of their ad budgets on newspapers or magazines. Eleven percent spent more than 50 percent on print, but 58 percent spent less than 30 percent.

Although the survey results were likely a bit skewed, given that they were collected on sites providing information about online advertising, the responses regarding Internet advertising were very positive. Thirty-three percent of respondents said they spent 50 percent or more of their budgets on online advertising. Twenty-seven percent placed their online spending level at between 20 and 40 percent of their budgets, and 40 percent of respondents said they spent 10 percent or less on online advertising.

E-mail was the big star of the CyberAtlas survey. Sixty-eight percent of respondents said their staff sent email messages directly to customers. Nineteen percent used a third-party firm to send email messages to potential customers, and 24 percent placed advertisements in email newsletters. Seventeen percent of those responding said they did all three.

When you’re talking about direct response advertising, email seems to fit the bill, according to respondents. Ninety-three percent of those surveyed said they found email marketing cost-effective or very cost-effective. Urgent messages were another occasion when marketers thought to call upon email, with 96 percent of respondents saying they found it a cost-effective or very cost-effective medium for such communications.

All in all, online advertising and marketing media seemed to have a bright future, if the responses of those surveyed are any indication. The industry isn’t mature yet, but it’s getting there.

Pamela Parker is the Managing Editor of internet.com’s ChannelSeven.com and Internet Advertising Report.

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