• by December 13, 2001

Two sets of numbers released today show that online ad spending for the first three quarters of this year is down, but online consumer spending for the month of November has returned to pre-September levels.

Online ad spending dropped 17.1% for the first three quarters of 2001, compared to the same time last year, according to CMRi, the Internet division of Competitive Media Reporting.

Spending for the first three quarters was $2.1 billion.

CMRi ranked spending by advertiser and website. The leading Web advertisers are Ebay, General Motors, Providian, Amazon.com and Classmates Online, who spent from $21 million to $35.7 million through Q3. Sites with the most revenue include Yahoo, AOL.com, Excite, Lycos and Netscape, with revenue from $79 million to $284 million (Yahoo is first, with $284.3 million).

The news is hardly unexpected and the second report from CMR this week. Offline drops of 7.8% for all media for the first three quarters were reported two days ago.

Surprisingly, David Peeler, CMR's CEO, looked at the bright side, predicting future growth for online advertising. "We may see a bright spot in spending post-holiday, as more traditional companies move their ad campaigns to the Net," he says. "Companies are utilizing online targeting to market brands to appropriate end users. As companies take advantage of this tactic, the advertising industry is hopeful of seeing a steady increase of dollars budgeted for Internet campaigns in the new year."

On the consumer side, Nielsen//NetRatings and Harris Interactive today reported that ecommerce spending in November 2001 jumped 10% from November 2000.

The study shows that in the face of national concerns and a softer economy, there were 10% more shoppers and dollars spent in November versus a year ago. The latest data indicate that the 2001 holiday season will achieve more modest gains than previously expected. The 10% annual growth is the lowest seen this year.

September online spending jumped 54% year-over-year while October increased 25%, setting expectations for a healthy holiday season. The latest month's data reveal that ecommerce sales rebounded to $5.3 billion, on par with pre-September spending levels. Spending rose 14% from October to November, half of the 29% increase seen in 2000.

"Forty-two percent of November's growth is coming from the travel category," said Sean Kaldor, VP of analytical services at NetRatings. "Travel has shown a gradual recovery from October, as consumers return to the skies."

Several sectors have experienced slower than expected growth, including clothing/apparel, consumer electronics and toys. Bucking this trend, health and beauty products, videos, and home and garden products have spiked more than 50% from a year ago.

"Although the overall industry growth rate is battling a tough economy, the spoils of growth are going to key market players," said Kaldor. "With fewer merchants online than a year ago, those remaining will achieve growth rates much higher than the industry as a whole."