Reports From the Media Frontiers: May 2002 Traditional Edition

  • by May 24, 2002
Lots of Talk, Little Action
by Steve Smith Cross-platform ad sales are a bit like sex in high school. There’s a lot more bravado (i.e., press releases) than action, so far as we can tell. Listen to the locker room chatter and you’d think that you’re the last virgin left on earth. That’s if you listen to the braggarts at media companies who insist advertisers are hot for this action. Translation: we haven’t managed to get beyond first base, but gee, our date really wants it …we can tell.

Even Online High School’s best gossip, research aggregator eMarketer, can’t find any firm numbers on cross-platform sales. When we asked Senior Analyst David Hallerman for some dish, his pipeline was empty. "I’d like to see some of those cross-media ad stats, too," he said.

The Big Man on Campus (that would be AOL Time Warner, for those who are still hanging with the analogy) says he’s getting some: $1 billion from cross-platform deals during 2001. A flurry of press releases in early 2002 boasted of multimillion-dollar buys from Wendy’s and Unilever. Since then, however, AOL/TW seems to have hit a dry spell, if the dearth of press releases is any indication. March saw the only recent announcement — of a cross-platform deal for Schering Laboratories’ Clarinex allergy med. Sniff, sniff.

B2B may well prove to be the class nerd with surprising animal magnetism, however. Highly evolved print/Web combos such as (a.k.a. Network World) have more than half of their print advertisers buying online, and niche verticals such as Penton Media’s Machine Design Magazine ( are very successful in bundling print and online industry directory listings.

For the consumer side, it looks like a hit-or-miss proposition for a while; advertisers remain unconvinced that cross-media, particularly incorporating online, is a good buy. Though many found credible a recent study showing that a 15 percent increase in Web spending during an integrated campaign for Unilever’s Dove Nutrium soap bar would lift brand awareness 24 percent, here’s the telling postscript: Unilever declined to say whether it was increasing its online budget as a result. What a tease!

Nowhere to Go But Up
by Masha Geller Good news in the online advertising world: the worst of the market’s downturn has passed. In the "Online Advertising: Statistics, Strategies, Projections & Trends Report" released in early April, eMarketer — one of the few trustworthy forecasters left out there — predicted that U.S. online advertising spending will increase 11.0% in 2002. That’s a bounce back from the 11.0% drop in 2001.

"Online advertising by traditional companies is one area of growth," says eMarketer analyst David Hallerman. "As the Internet audience becomes increasingly mainstream, we’ll see more and more cross-media campaigns from traditional advertisers.

"The news is where the money is being spent," says Hallerman. "Banner ads, which traditionally have accounted for the bulk of online ad revenues, are declining. Large, rich media ads are getting better click-through rates."

The Online Advertising Report also explains that in order for the online ad industry to reach its potential, the complexity of pricing models and ad-size standards needs to be addressed. For example, Jupiter Media Metrix predicts that performance-based deals will become increasingly prevalent, rising to 30% of all online ad revenues by 2006.

But all is not rosy online. JMM one of the two leading online activity tracking firms, announced recently that it had only enough cash to last through the middle of the second quarter and it would likely go out of business unless it sold some of its assets. To that end, JMM sold its AdRelevance division, which supplies intelligence on where, when, and how much competitors and potential clients are advertising on the Internet. It went to archrival Nielsen//NetRatings for $8.5 million.

Things aren’t going too well for America Online either, so the company has intensified efforts to improve its weak Internet advertising business, putting former AOL chief Bob Pittman back in charge of its Internet business. Pittman, who had been serving as chief operating officer–elect, is back at the helm of the online unit in a position he held until the company’s merger last year with Time Warner.

Traditional advertisers ruling a new medium? Nielsen as the top measurement company? Bob Pittman back in charge of AOL? In online, it looks as if everything old is new again.

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