If Internet advertising isn't quite having a banner year, at least banner ads are doing OK.
Meanwhile, highly targeted and much-vaunted email advertising continues to grow in popularity but doesn't appear to be expanding its share of online ad dollars, according to the latest report from the
Internet Advertising Bureau
industry trade group. That fact is particularly relevant to Internet advertising firm
, which said Tuesday that its efforts to expand into various online marketing areas had resulted in an acquisition of an online direct marketing business.
The findings come from the IAB's ongoing study of Net ad spending, conducted by
. Internet advertising amounted to $2.12 billion in the second quarter of 2000, up 8.8% from the first quarter of the year and more than double year-ago levels. Internet advertising will likely amount to $8 billion in 2000, says IAB Chairman Rich LeFurgy.
The IAB's figures, extrapolated from confidential data supplied by companies that sell Internet advertising, are an important indicator of the real health of the online ad business, which slowed down around midyear after an energetic first quarter.
The second-quarter figures are tentatively good news for the online advertising industry, especially for major players like
and DoubleClick. As the IAB has pointed out before, the largest media companies are getting a larger share of online ad dollars. The top 10 online publishers won 71% of online ad dollars in the second quarter, up from 69% in the first quarter. The top 50 properties got 91% of the money in both quarters.
Simon Says: Dry Up!
Still, companies like Yahoo! and DoubleClick have seen their shares plunge in recent months as investors worry that the economic slowdown in the U.S. will dry up ad spending. And the ad-spending message is even less clear for companies involved in developing alternative advertising vehicles, such as email advertising, which has generated plenty of investor attention this year. From the first to the second quarter, the share of online advertising in emails rather than on Web sites fell to 2% from 3%, according to the IAB. PricewaterhouseCoopers says the absolute value of email advertising probably rose.
That's relevant to DoubleClick, which Tuesday morning said it would acquire email marketing firm
for $191 million in stock. DoubleClick has been making numerous acquisitions this year in various areas of online marketing to solidify its lead in the online advertising business.
"Direct marketing is a seasonal business, and certainly Internet direct marketing follows the same pattern," says NetCreations spokeswoman Adrienne Press. "Fourth quarter and first quarter are the strongest, and spring and summer tend to be much weaker." She points out that NetCreations' revenue for the fourth quarter of 1999 equaled the total of its three prior quarters.
Survey data show that banner ads, those bumper sticker-shaped ads atop Web pages, remain the most popular Internet advertising vehicle, says the IAB. Banner ads accounted for 50% of online ad spending in the second quarter of the year, down from 52% in the first quarter. A distant second in terms of online advertising share were sponsorships, which may include ad banners; sponsorships remained flat, accounting for 27% of ad spending.
On Tuesday afternoon, NetCreations was down 31 cents to $11.06. DoubleClick was off $1.75 to $27.88.