• by November 29, 2000

Web merchants are spending more online. That's according to new research from Shop.org and The Boston Consulting Group.

The study found that average customer acquisition costs for Web pure-plays and click-and-mortar firms dropped from $40 per customer in second quarter to $20 in the third, as online retailers refocused their marketing spending.

The survey found that in Q3 of 2000, 64% of online retailers' marketing budgets went into online media, up from 59% in Q2. Additionally, while 89% of respondents are launching holiday marketing and promotional campaigns, only 4% intend to increase spending on TV advertising.

The survey also looked at non-advertising or e-mail marketing efforts planned by online retailers for the holiday season, which include gift certificates (54%); offering shipping deals (40%); signing new or revised placement deals with portals and search engines (39%); signing new partnership deals with content sites (36%); and incentivizing purchases with a free gift (29%).

As expected, pure dot-coms appear more committed to the Web, with 74% of those surveyed indicating that they do not plan to increase spending on offline direct marketing. Only 58% of click-and-mortal retailers said the same.

Unfortunately, while the study asserts that online e-tailers are spending greater portions of their marketing budgets online, that heightened spending doesn't seem to be affecting online marketing and ad companies, many of which are still posting weak revenues.