• by April 18, 2006

More marketers than ever are drinking the Kool-Aid when it comes to online media and marketing. Now it's not so much a question of whether they'll commit budget to online advertising and promotion, but of how much money they'll earmark and for what types of interactive media, including brand advertising, video, Web site design and development, search marketing and optimization programs, contests, behavioral targeting, wireless, and other nascent and emerging forms of new media.

In 2005, a relatively new technology brand, Vonage, ranked as the No. 1 online advertiser, according to data fielded by TNS Media Intelligence, on whose research OMMA's list is based. TNS' ranking of the top online advertisers is drawn from the media value of all forms of display or brand advertising and anything that includes a graphic image. However, its ranking doesn't include search marketing expenditures, which account for more than 40 percent of all online advertising dollars.

"We are working with some outside organizations to try to move forward on [accounting for] search," says Jon Swallen, senior vice president, TNS. "We're aware that search is big and a growing hole, and that there's a great need within the industry to fill it." With that caveat, there are a few observations we can make: Technology marketers continue to be aggressive in the online media space. Vonage relied heavily on online media and marketing to launch its Voice over Internet Protocol phone service; Microsoft spent an estimated $34 million to promote its msn brand online and spent some $9 million to flog Windows XP software; Verizon spent handsomely to tout its online service and YellowPages.com; and Dell and Hewlett-Packard sharpened their online commitments.

Time Warner turns up in the Top 10 largely due to AOL, which used abundant online promotion in 2005 to promote its flagship aol.com network and a multitude of branded channels and services. GUS Plc, the holding company for two ubiquitous brands on the Web, LowerMyBills.com and FreeCreditReport.com, spent nearly 80 percent of the $127 million on advertising for LowerMyBills.com, according to TNS.

With Classmates.com, Swallen doesn't think the company wrote a check to purchase $143 million in online media. In that case, "We're assigning value to the activity. It may well be a barter arrangement, or an ad-serving arrangement," he says, explaining, "They're putting a zillion impressions out there but not paying for it." TNS calculates the volume of impressions that are on the Web; if Classmates had to pay for them at open market rates, the value would total $143 million.

But it wasn't just new media companies whose online spending surged. Beleaguered General Motors Corp. was also a big believer in online advertising, and committed dollars to multiproduct advertising, especially within its Pontiac and Chevy brands.

-Tobi Elkin

1. VONAGE

Tipping the Online Advertising Scale

Tonnage + targeting = brand + sales

In the wake of the dotcom meltdown and banner ad fatigue at the turn of the millennium, no one wanted to believe that even the most massive online buying could actually build a brand from whole cloth. Remember X10?

In 2005, Vonage continued to rewrite conventional wisdom with a $275.7 million spend in online display ads that truly dwarfed other players' Web media plans. And in three years, the brand has bolted itself so firmly onto Voice over Internet Protocol (VOIP) technology that cable and telecom providers now have to spend hundreds of millions to buy back some mindshare.

With 2.7 million unique visitors a month, Vonage.com has coveted reach. Most analysts agree that Vonage's online ubiquity is not a result of mindless carpet bombing, but instead a highly calibrated use of performance-based and targeted advertising that delivers both brand and direct response. "I often see Vonage ads in targeted tech places," says Shar VanBoskirk, senior analyst, Forrester Research. "It's a volume strategy, but they are going for a broad reach and as targeted a depth as they can get."

With Media Contacts managing both display and search buying, the overall Vonage spend represents a highly integrated approach. The company's chief marketing officer, Dean Harris, left the company in early 2006 for Kayak.com, but before he left he established that at least 50 percent of the Vonage budget should go toward online media and marketing. The company focuses on performance-based deals driven entirely by customer acquisition costs.

Vonage keeps its strategy close to the vest, but sources working with the company say that cost per acquisition continued to drop in 2005 as sales grew, in large part because the message works across TV, online display, and search executions. Vonage was among the first to bring its popular TV spots online, but Harris and others involved in the marketing strategy insist that the company doesn't focus on specific campaigns so much as view customer acquisition as an ongoing process involving all media. Cost per acquisition declines when offline and online media work in concert to move the customer from awareness to sale.

While not included in the TNS totals for spending, Vonage's considerable search buying efforts get a lot of juice from display advertising that helps pre-qualify searchers and correlates directly to spikes in search click-throughs and conversions. Famously obsessed with metrics, Vonage is known for working with ad networks to maximize performance and minimize cost, analyzing and tweaking every aspect of display messaging, search copy, and the way landing pages affect conversions.

It's not always pretty, says VanBoskirk, but the often lackluster creative shows up where it should. "I think Vonage is best at targeting rather than format stuff. Any type of format can work with the right customer on the right page."

A substantial presence on Yahoo Mail last year, for instance, placed a low-price offer in front of Web-savvy frequent communicators. "It's not a finesse campaign, but they recognized something in their crudeness that is quite sublime," says Joseph Jaffe, marketing consultant and author of Life After the 30-Second Spot. "You can be on some obscure page frequented by 14 people if all of them order Vonage, and you pay for performance only. If you pay on interest level and ability to convert, do the demographics matter?" Jaffe notes.

While Vonage continues one of the bravura performances in Web media in 2006, it now faces a two-flank challenge. Can it differentiate itself from the well-branded telecom and cable VOIP competitors, while also keeping its growing customer base on the digital line with retention and loyalty strategies?

-Steve Smith

2. TIME WARNER

Big Spender

Relaunches, new products, and services drive AOL media spending

Time Warner ranks No. 2 on the TNS list, and the bulk of the media giant's online media spending is done by its AOL division. In 2005, AOL relaunched its flagship aol.com portal; introduced Triton, an upgrade to AOL Instant Messenger; streamed the day-long Live 8 concert; upgraded its safety and security features; and promoted its evolution from a subscription-based service to a mix of free, ad-supported content and premium subscriber-only services. Given the surge of activity, perhaps it's a bit surprising that AOL parent Time Warner spent just $169.7 million on online media last year, according to TNS Media Intelligence.

To hear AOL Media Networks' executive vice president and chief operating officer, Kevin Conroy, tell it, the sum was well spent. "In our marketing activities, we're very focused on the online space for the obvious reason -- that's where our audience is," he says. "They've embraced the medium and they're proficient with it." The aol.com rollout is emblematic of the way the company's marketing minds ply their trade. Rather than merely flogging the AOL brand, the aol.com campaign attempted to call attention to the wealth of content of which non-subscribers may not have been aware. "We marketed the plays, not the theater," quips Steph Dolgins, vice president, audience marketing.

Creatively, the campaign focused on four key pillars: entertainment (the AOL on-demand music series); news and information (search capabilities, money/finance tools); convenience (AOL Travel and AOL Living); and connections (free e-mail, instant messaging). The ads, roughly 20 percent of which featured rich media, connected those who clicked on them right to the content, as opposed to the aol.com portal.

"AOL is a real populist brand, in the best way," says Michael Aimette, executive creative director of Atmosphere BBDO, New York, which worked on the campaign. "To imbue the work with the same tonality AOL has, the natural step was to go straight to the content."

In the fourth quarter of 2005, AOL's safety/security push targeted a considerably smaller audience -- moms likely to be interested in additional anti-virus and anti-spyware tools. Instead of blanketing the home pages of big-name sites, AOL dug deeper. For ads that ran on cnet.com, for example, AOL established a front-end on the site's home page and an equal, if not more extensive, presence on pages within its PC center.

"That makes our message a little more relevant and targeted, plus the big media play on the home page gets volume and reach," says John Lane, AOL's senior vice president, online marketing.

In several instances, notably the aol.com relaunch, the company's online campaigns were buttressed by offline support, rather than vice versa. Nonetheless, Lane stresses the importance of online and offline integration. "What we strive for is integration beyond that look-and-feel level. We need the work to be starting from the same point," he says. To that end, he praises AOL's agencies, which include New York-based shops Hill Holliday (online consumer promotions), Attik (aim online advertising), and OMD (online media buy for aol.com).

"I'm happy to say that they work together flawlessly whenever the situation calls for it," Lane notes. "When they come in with a pitch, they don't tell us which agency had which idea, and we don't ask." As for the specific apportionment of AOL's media dollars, Conroy notes that "well over half" of the aol.com relaunch budget was spent online. He adds that "about a quarter" of the company's online marketing budget is earmarked for search, though that figure is "trending higher." Conroy estimates that AOL ran more than 35 different search engine campaigns during 2005.

-Larry Dobrow

3. LOWERMYBILLS.COM

Lower Bills, Higher Online Spending

Ubiquitous advertiser nets prospects for partners

Although LowerMyBills.com is all about helping consumers reduce their spending through lower interest rates or debt consolidation, the company itself is spending, spending, spending. Purchased by Experian in May 2005 for approximately $400 million, LowerMyBills.com is one of the most prolific Internet display advertisers, with its parent, the U.K.-based GUS plc, shelling out enough to keep it in the No. 3 position in online advertising spending between Time Warner and Dell.

Browse any number of interest rate-related Web sites -- such as Bankrate.com, the personal finance section of About.com, or those in other categories, such as Orbitz.com in travel services -- and there's a good chance you've seen a LowerMyBills.com pop-up, pop-under, skyscraper, or banner ad. The ads are just about everywhere on the Web. In fact, about 80 percent of the $167 million spent online in 2005 by GUS plc was for online advertising by LowerMyBills.com, according to TNS data.

"They are among the savviest buyers out there," says Jay Weintraub, director of new revenue strategy at Revenue.net, a division of Los Angeles-based Oversee.net, which also operates two lead-generation divisions, one of which covers mortgage banking. "LowerMyBills.com holds all of its buys to a strict performance accountability. Their spends are not an exercise in branding," Weintraub says.

LowerMyBills.com is looking to deliver high-quality prospects to its clients. Its free service works by inviting consumers to enter specific information online, and then matches them with the providers that best meet their needs. LowerMyBills.com partners with more than 500 service providers across more than 20 categories. The categories include home mortgage, home-equity loans, purchase loans, debt-consolidation loans, credit cards, auto loans, insurance, and cell phones.

Commission Junction, a provider of online performance marketing solutions, last fall named LowerMyBills.com one of its top-performing partners based on marketing strategy and overall success.

But it's not just placement and partnerships that have propelled LowerMyBills.com to the No. 3 spot on the TNS list. It's also the creative. The ads, designed primarily by an in-house team, feature peacocks, flamingos, corn, a hippie wizard, babies, dogs, and butterflies, and are often paired with a graphic representation of the 50 states. "Many are designs that a person wouldn't normally assume could work for mortgage ads," Weintraub says, but apparently they do. The whimsical, eye-catching ads appear to have high recall among consumers.

But would-be imitators, beware: The company recently won a $200,000 court judgment in a copyright infringement lawsuit against NexTag.com, an online comparison-shopping site that used similar imagery in its own online advertisements. LowerMyBills.com is also pursuing separate lawsuits against other companies for copyright infringement of its online advertisements.

-Sheree R. Curry

4. DELL

Direct Response Can Cut Both Ways

Dell stayed the course online, even in the midst of a public relations fiasco

Depending on whom you ask, the fourth biggest investor in online advertising and the world's largest PC maker either stayed the course in 2005 or caught some serious hell from a new online marketing ecosystem. Even as Dell set its sights on growing international markets for PCs, especially in Latin America and China, it continued to push hard in the U.S. with online advertising flogging low-priced PCs.

TNS Media Intelligence pegs Dell's online spend at 155.4 million in 2005, and Dell says its total advertising budget for the last fiscal year was $576 million. The company doesn't break out spending by platform, but company spokesman Venancio Figueroa says, "Online advertising has become a larger part of our overall mix, and I do expect that trend to continue."

Critical Mass is Dell's interactive agency of record, while OMD handles media. In 2005, Dell focused large parts of its budget on major news and tech portals. Nielsen/NetRatings tracked Dell spending the most on CNN.com and Yahoo, where you'll often find Dell aiming for the top of the purchase funnel on the CNN home page with rich media ads for entry-level PCs. In addition to big buys on CNET, Earthlink, and Ziff Davis sites, the Dell media plan seemed to favor branded news (NYTimes.com, USAtoday.com, and washingtonpost.com), along with forays into the sports and online gaming audiences.

Figueroa says that Dell campaigns for the high-end XPS gaming PCs target more savvy Web users with sponsorships of properties like CBS's NCAA games. "It's the tech-savvy customer who's most likely to watch games on the computer. We are interested in reaching that demographic as we try to raise the profile of our XPS brand," he says.

Some analysts argue that Dell misses the branding forest for the direct-response trees. "They are still focused on the marketing aspect and getting that initial sale," says Chris Carfi, co-founder Cerado, which provides sales and marketing organizations with customer communication services. New marketing consultant Joseph Jaffe suggests, "They may be suffering brand neglect. The ads are instantly forgettable. I'm not sure what they are anymore."

A pioneer in leveraging online media to market directly to the consumer, Dell became a case study in 2005 for mishandling attacks from blog-empowered consumers. Blogger Jeff Jarvis chronicled his ongoing battles with Dell customer service in an extended rant on his BuzzMachine blog that became known as "Dell Hell," a pile-on of disgruntled customers.

Despite the public blog flogging, Dell seemed unfazed by the assault on its core brand asset: direct relationships with customers. "I saw absolutely no change in Dell's behavior based on not just my story, but the stories of scores, then hundreds of frustrated customers," says Jarvis. "Dell failed the test, badly."

Dell's long-standing direct marketing strategy may hook first-time buyers, but, Carfi says, "My feeling is they look at these connections to customers as discrete transactions." Unlike Apple, which cultivates a loyal community of defenders, Dell has no such customer relationships. "All the performance-based advertising in the world is meaningless if there is no meaning or substance behind it," Jaffe adds.

And yet, is a blog flogging as important to the bottom line of a huge multinational corporation as the self-important blogosphere would like to think? Even after watching the BuzzMachine firestorm unfold from afar in 2005, Jaffe admits, "I still bought a Dell."

-Steve Smith

5. VERIZON

Telco Giant Keeps Its Edge

Verizon proves itself a pioneer in new technologies and new media

Navigating the transformation from telephone service to myriad new technology platforms has proven a daunting branding challenge to most telecom providers. It's a challenge, however, that Verizon, the fifth biggest online advertiser in 2005, has taken on with relish.

"Our philosophy in looking at new media opportunities," says Brian Price, executive director of Verizon's online center of excellence, "is never to be content with what worked yesterday and to keep testing new advertising formats to stay competitive."

According to Price, online spending for search and display rose to 11.5 percent of Verizon's total ad budget last year.

"So far we've had very few campaigns where online served as the lead tactic," Price says. "That said, we absolutely ensure that all of our offline marketing drives prospects to a URL and online ordering flow that features unique online offers. Every offline and online execution features an online call-to-action with an exclusive online order. This has helped make online our most efficient sales channel."

In 2005 Verizon embarked on its largest-ever combined online product and brand marketing effort for its national consumer DSL rollout. Verizon employed banners, video units, pre-roll, paid search, online sweepstakes, podcast advertising, and RSS feeds. The campaign, entitled "Richer, Broader, Deeper," was designed in collaboration with Verizon DSL's online creative agency of record R/GA, New York, and online media buying agency Avenue A, Seattle, and featured videos posted by consumers testifying how broadband has benefited their everyday lives.

"There were two related challenges that drove our work," says Richard Marks, group account director at R/GA. "First, to constantly demonstrate and reinforce Verizon's leadership in broadband technology, and from there to move forward its metamorphosis from a telco brand to a full-fledged entertainment brand."

In pursuit of that metamorphosis, Verizon has been a clear leader in pushing the envelope, bringing broadcast-quality video to online executions and making creative use of consumer-generated content.

Last fall Verizon sponsored three short films by New York University film and business school students exploring how broadband was changing individual lives and the cultural landscape. R/GA developed a Web site for Verizon Broadband Films, www.verizonbroadbandfilms.com, to showcase these films, as well as filmmakers' bios, journal entries, documentary clips, and scripts.

To launch its Business DSL in the African-American community, Verizon developed a campaign called "Realize Ambition" featuring local African-American entrepreneurs who use Verizon DSL to help their businesses. The "Realize Ambition" sites feature mini-documentaries -- created in-house at R/GA -- that showcase the unique talents and interests of each subject, their neighborhoods, as well as short spots on "how they do it" with Verizon products.

Verizon's SuperPages.com, part of Verizon's Information Services division, also upped the ante in online, launching a "We Know the Holidays Around Here" promotion during the Christmas holidays. Created by tm Advertising, Dallas, SuperPages.com's agency of record, the campaign rewarded users for conducting searches, writing user reviews, referring friends to the site, printing coupons, and downloading the SuperPages.com toolbar.

Price looks ahead to a continuing expansion of the brand's online promotional and branding mix this year. "Our agencies are all innovation leaders in their particular space," he says, "and we rely on them to keep challenging us to develop breakthrough campaigns."

-Phil Leggiere

6. CLASSMATES.COM

Behind the Geeky Pop-ups

Customer acquisition drives site's spending and bartering

Classmates.com ranks in any Top 10 list of online marketers for its sheer ubiquity. It's not doing anything flashy or ground-breaking. The company is simply one of the strongest brands on the Internet, thanks in large part to countless pop-ups and banner ads, like the ones with a nerdy, bespectacled teenager which have appeared -- well, everywhere.

Unlike other brands, Classmates has no choice but to spend money on online promotion and marketing, because that's where it gets new subscribers -- and it needs a constant influx of new subscribers because that's where it derives most of its revenue, says Jim Friedland, a Cowen & Co. analyst who tracks the site's owner, United Online. "They're stuck in their own business model," Friedland says. "The majority of their spend is on customer acquisition."

Competing social sites like MySpace.com invite users to sign up for free and make their money by selling ad space, and that model is growing, Friedland says. Classmates.com remains a giant for now, boasting 40 million "friends" (people who signed up for a free look around the site) and enviable brand recognition.

"My understanding of their budget is that everything is performance-driven," says Jay Weintraub, director, new revenue strategy at Oversee.net. "They'll buy on CPM [cost per thousand], but how well does that turn into enrollment? Their strategy is very different than somebody promoting a brand."

So how many visitors end up enrolling? Classmates.com, discreet about its strategies and data, prefers not to say. The company declined interview requests.

TNS Media Intelligence calculates that the popular social networking site spent about $143 million in 2005 on online media and marketing, though there's some question whether that was all cash. Friedland estimates that Classmates.com actually spent half that or less. Otherwise, he says, the site would be losing money. The familiar banner ads, keyword purchases, and links from affiliates are likely the main drivers to the site, Friedland says. Once there, people can register using their e-mail addresses, but must pay an annual fee to contact former pals.

The ads are simple and the site is relatively low-tech, though heavy on outside advertising. Recently, Classmates added features designed to keep users online longer. For example, subscribers can post photos and share more personal data. Frequent e-mails to users announce when new classmates have signed up. "They're trying to increase people's engagement with the site," Friedland says, so that visitors view more pages and therefore more ads.

The aggressive e-mail program may backfire. Friedland, who receives an e-mail at least once a week, says if he did the math, he'd end up with more classmates than he graduated with. His guess? Classmates.com has expanded the definition to include people a few years younger or older, even faculty.

Founded in 1995, Classmates.com survived the dotcom flameout. United Online, known for low-cost Internet service provider brands NetZero and Juno, bought it for $128 million in 2004. Analysts, including Friedland, predict the company's savvy financial leadership will keep it steady. "Their business has been increasingly profitable, although United Online does not break out the numbers," says Youssef Squali, Jefferies & Co. analyst.

Friedland considers the subscription model fully mature, and Classmates.com will need to explore new ways of making money. One challenge is keeping subscribers, as Squali observes: "They get names and addresses and e-mails for all their buddies, and they don't necessarily renew, because everyone they've wanted to get in touch with they've been able to." New features and services may make the site "stickier," but it's not there yet, Squali adds.

-Liz Tascio

7. NETFLIX

What's Red and Black and All Over?

Netflix leverages online to boost strong word-of-mouth

Any regular Web surfer knows it's hard to go a full day without seeing the ubiquitous Netflix red-and-black, whether it's a banner or pop-up ad. Yet when you ask this pioneering company, now the world's largest online DVD rental service about its marketing strategies, it likes to insist that the site sells itself.

That's not just talk. Netflix spokesman Steve Swasey points out that in regular surveys of members, 85 percent have said that they joined after being referred through word-of-mouth by a friend, family member, or co-worker. Still, judging by the $136,384 million the movie rental company spent last year on online advertising, Netflix has clearly determined that it needs more than word-of-mouth to continue its meteoric growth.

The company has spent its online ad dollars on a combination of strategies to encourage site traffic: from the eye-catching click-through banners and pop-ups, to aggressive affiliate and affinity programs (which help new members, for example, earn air miles), to regular e-mails sent to members encouraging both usage and referrals.

This year also saw a Netflix tab on Yahoo Movies. When users checked out a new theatrical release, a "save to rent later" Netflix tab appeared, even if the DVD's release was months away. Netflix supplements such campaigns with plenty of offline marketing, including TV spots and free-standing inserts in Sunday newspapers.

Tyler Lafferty is a principal in the online creative development shop Seven2 Interactive, which produced Flash banners for Netflix that ran on a variety of large online networks like msn. He attributes the brand's marketing success to the way it focuses on conversions.

"Netflix is a pretty sophisticated group of people," Lafferty says. "They are good marketers who really watch their numbers, so we did a number of different creative executions, and they really keyed in on which ones were converting the most. We are really trying to test what message is resonating with the users, whether it's the number of titles they have or one of the price options," he explains.

Lafferty attributes Netflix's marketing prowess to a proprietary, in-house measuring system. "They really key into which piece of creative is doing the best and then use that to their advantage throughout the rest of the campaign," he says. Internal tracking mechanisms and software tracking monitor the advertising down to the exact banner and "which piece of creative, which message is actually driving the most conversions."

It's no surprise that an online product like Netflix would focus its marketing strategies on the Web. "We've had ads online since the beginning," Swasey says. "We find those to be very effective because our members use Google and Craigslist. They are Internet-savvy."

But despite the company's big online ad budget, Netflix's most successful marketers appear to be its own paying customers. "Foresee Results has ranked us the No. 1 online retailer for customer satisfaction two years in a row," Swasey says. "We have more than 90 percent of members recommend Netflix to a friend, family member, or co-worker."

The key to Netflix's online marketing success is inextricably tied to the quality of its online product. "Members tend to love Netflix," says Swasey. Since it began renting DVDs in 1999, the company has grown to more than 4.2 million members, and forecasts a minimum of 5.9 million by end of 2006.

-Laura Weinert

8. GENERAL MOTORS

Buying Online Engagement

Despite marketing cuts, automaker doesn't skimp on Web-savvy tactics

The world has changed enormously since the 1950s, when General Motors' then-CEO Charley Wilson famously said, "What's good for General Motors is good for America." In that era, GM towered nearly unchallenged above the economic landscape.

Today, of course, as a quick scan of the business pages makes clear, gm faces fierce competition from dozens of high-powered global brands. Recognizing the radical marketing challenges of an era in which 70 percent of new car customers use the Internet at some point in their purchase decision, the company has dramatically expanded its commitment to interactive media and marketing in the past year.

"In working with GM, the strategic question they put to us was, 'How can we more deeply and intensely engage media consumers using online and offline content integration to connect them more tightly both to the brand and to their dealerships?'" explains Victor Lee, vice president of promotions at Digitas, Boston, gm's online creative agency. GM pursued a strategy of customer engagement with a wide variety of interactive tactics.

In launching three new V-series models to challenge BMW and Mercedes, GM's Cadillac division deployed an interactive competition and online/offline content integration strategies. Following up on a 2005 Super Bowl spot with a 5-second video showing the car revving from zero to 50 miles per hour, Cadillac and Leo Burnett, Detroit, along with Arc Worldwide, Chicago, used the Web to sponsor a contest for the best 5-second film. Consumers were invited to submit entries to CadillacUnderFive.com, hosted by a John Travolta movie character, Chili Palmer, the Caddy-loving gangster from the films "Get Shorty" and "Be Cool."

Pontiac's launch of the Solstice Roadster took the product/media/ content integration a step further. On an episode of "The Apprentice," the show's two teams were challenged to design a promotional brochure for the forthcoming Solstice Roadster, with the results presented to Pontiac executives. During the show, Pontiac ran a 60-second ad that showed off the vehicle and directed viewers to www.pontiac.com/apprentice. At the site, consumers completed an online registration form that included a unique identification number.

"The purpose of getting people to the Web site wasn't to sign up for a contest or a prize, but to actually sign up to buy the car months ahead of a release," Lee recalls. "Only 15 minutes after the announcement, traffic at the site increased 1,393 percent," he adds, "We sold the first 1,000 cars out in 41 minutes." After the first 1,000 units were sold, consumers could either choose to be placed on a waiting list or place an order for a "regular" Solstice. Orders were received from more than 650 dealers in 47 states, with more than 4,000 customers put on the waiting list.

Pontiac added a new twist to search advertising by tagging the end of a 30-second TV spot with an unusual call to action directing viewers to Google the word "Pontiac."

"People use Google every day to research all things, including cars. So what we were doing was just to engage them in the way that was most relevant to the way they actually used the Web," Lee says, adding, "We invited them to compare Pontiac to other cars."

Though GM has reportedly trimmed its multimillion-dollar media budget, the automaker revved up its Internet spending by 60 percent in the past year to $123 million, and plans to continue the trend in 2006.

-Phil Leggiere

9. HEWLETT-PACKARD

HP Hits Send on Interactive Strategies

Tech firm combines a willingness to experiment with a democratic planning approach

As consumers have changed their media consumption habits by accessing more content online, technology behemoth Hewlett-Packard has shifted its focus to Web marketing. In 2005, there was a "concerted effort within the company to shift to digital," says Mary Bermel, HP's director of interactive and new media. The shift placed a new emphasis on providing better targeting, testing, and return on investment analysis. The results, Bermel says, have been very good, as "interactive is becoming the cornerstone of HP's media and marketing efforts."

According to TNS Media Intelligence, hp spent $109 million in online media last year, out of an estimated $900 million budget. But the TNS estimate doesn't include the company's considerable search spending. Bermel declines to report just how much HP spends on search, but she will say that the company tries to keep spending in line with the IAB/PricewaterhouseCoopers' online data, suggesting that nearly half of HP's interactive budget is earmarked for search.

Bermel emphasizes that search is a critical component of HP's marketing mix. While recent reports suggest that marketers are no longer achieving the handsome returns they once did with search, Bermel maintains that "search is still very much in its nascent stages of development." She says hp plans to increase its search spending this year, looking to measure the impact of vertical search, as well as testing the branding value of text ads, something she says has yet to be measured adequately.

Bermel stresses that search should never be separated from other marketing initiatives. "Search needs to be integrated into broader campaigns, because it's the way most people use the Internet," she says. DoubleClick's Performics unit and Modem Media, San Francisco, are in charge of hp's search marketing efforts.

In fact, according to Forrester Research analyst Shar VanBoskirk, an integrated agency planning environment is one of the things that sets HP apart from other global advertisers. VanBoskirk, who recently completed an e-mail marketing report for the company, says hp gathers each of its agencies together for a roundtable discussion at the beginning of every quarter to discuss the company's goals. Depending on the criteria, the roundtable elects an agency to take the lead in executing a campaign, and the others move to support it where they can.

VanBoskirk says the democratic approach to planning is "very wise," because so many big corporations leave their agencies at a distance from one another, making it difficult to execute a truly integrated campaign. ZenithOptimedia, San Francisco, leads global media buying and planning duties for hp, while Modem Media handles interactive creative and account services. Goodby, Silverstein & Partners, San Francisco, provides creative for all media.

HP's willingness to spend money on testing new media is another aspect that sets it apart from other big advertisers. In a unique e-mail marketing twist, the company sends a series of free newsletters to customers who register for support, helping them with technical questions and concerns, and highlighting new product launches. The newsletters were designed to reduce customer service costs, and they've worked remarkably well, says VanBoskirk, who wrote the research report. Instead of employing someone to help with technical support, it's far less expensive for the company to use an internal marketing support team of four people. VanBoskirk says the coverage has unexpectedly boosted internal productivity by incentivizing product teams to perform better.

-Ross Fadner

10. MICROSOFT

Far from Going Soft

Software giant goes after big game with aggressive online push

It's not easy competing with Google. But in February 2005, Microsoft tried to do just that, breaking its biggest online ad campaign since the launch of the ubiquitous butterfly icon with its campaign to promote msn Search -- a combined online, TV, outdoor, and viral blitz designed to reach 90 percent of u.s. households 40 times over the first eight weeks of its run.

"MSN Search was the more traditional consumer campaign, reaching out and making people aware of the msn search capacity," says David Hamilton, director of marketing for Microsoft. "The campaign was very broad, oriented toward a classic Google-compete approach."

The campaign ran on sites throughout the msn network, as well as on CNET, usatoday.com, and CBS.SportsLine.com. Offline it ran during major TV events, including the NCAA tournament and the Academy Awards. Media buying for the MSN search campaign was handled by Avenue A/Razorfish, while planning was shared by McCann-Erickson and Avenue A. In 2005, msn received the largest piece of Microsoft's online media spend -- some $34 million of the $103 million spent by the software giant, according to TNS Media Intelligence.

While the upstart msn search could hardly be expected to dethrone Google, according to Nielsen/NetRatings the site has carved out an 11.4 percent share of searches, compared to Google's 46.3 percent and Yahoo's 23.4 percent at the beginning of 2006.

And Microsoft didn't stop at taking on one market leader in 2005. In a separate blitz, the software giant angled to cut into Sony's market share in video game consoles, putting its Xbox up against the PlayStation 2. Microsoft attempted to connect both with casual and hard-core gamers, with heavy online promotion on gaming and broad entertainment sites, and offline on cable.

"It was a combined approach: hit hard-core gamers with new presences on the Web, then do it in conjunction with organizations like MTV to broaden our reach," Hamilton says. "We worked with gaming sites, and did a lot of work around blogging as well. It was a nontraditional campaign." Hamilton declined to specify what proportion of 2005's $103 million online ad spend went toward Xbox promotion.

One of the more nontraditional pieces of the Xbox campaign was the ilovebees.com viral site, a cryptic, surrealistic site that dropped a number of clues about a coming alien invasion. The enigmatic site culminated in the revelation that it was a teaser promoting "Halo 2," one of the most anticipated Xbox releases ever, recording $125 million in first-day sales. The ilovebees.com site was created by 42 Entertainment, an Emeryville, Calif.-based agency.

Aside from competing with Sony and Google, Microsoft also worked to maintain its dominance in the office software space with the "A New World of Work" campaign, created by McCann-Erickson, which featured dinosaur office workers trying to figure out modern innovations.

"This was more of a business decision maker campaign than a technical campaign," Hamilton says, adding, "We did a lot of integration between online publications and print publications." The campaign ran in the offline and online versions of publications including PC World, The New York Times, Newsweek, The Washington Post, Business Week, USA Today, and The Wall Street Journal. Ads for Windows XP software made up $9 million of the $103 million online ad spend reported by TNS.

-Shankar Gupta