Report: Smaller Firms Drive Net Ad Sales

Although large companies boosted their online advertising by 18 percent during the fourth quarter of 2000, a higher percentage of Net ads came from small and mid-sized companies -- particularly in the dot-com industry -- according to data released Monday by AdRelevance, a Jupiter Media Metrix firm.

Specifically, AdRelevance found that companies whose quarterly sales top US$500 million purchased an average of 135 million online advertising impressions over the period. By comparison, small firms that had quarterly sales of $75 million or less bought 167 million impressions.

This strong showing not only helped small companies outpace mid-sized firms, but also came despite the fact that large companies buy ad space across more sites.

"Market-weary sites have been hoping for the larger, big budget advertisers to jump into the deep end of the online advertising pool," AdRelevance media research vice president Charlie Buchwalter said. These latest figures, however, indicate only a "gradual increase" in online advertising from large companies, Buchwalter said.

Dot-Com Control

While the online advertising industry has been hit hard in recent months as many dot-coms put belt-tightening measures in place and cut back on ad spending, AdRelevance concluded that Internet companies still have not ceded their front-runner market position to traditional firms.

"Dot-coms have been guiding the online ad industry since its inception, and the mid-sized dot-coms, whose customers are online, are continuing to lead," said Buchwalter.

For instance, Internet companies of all sizes purchased a total 769 million ad impressions on average during the fourth quarter, more than double the number bought by their traditional counterparts.

Moreover, AdRelevance said that dot-com ad impressions eclipsed traditional firms of equal size in every category. Mid-sized Internet companies led the way with an average of 453 million impressions, roughly quadruple the number bought by mid-sized brick-and-mortar firms.

Amazon Leads

AdRelevance also found that Amazon.com remained the Net ad champ, purchasing 6.1 billion ad impressions during the fourth quarter of 2000.

The e-tail giant managed to outdistance Microsoft (Nasdaq: MSFT), which had 4.1 billion ad impressions, and its MSN network, with 3.2 billion impressions. Rounding out the top five most widely advertised companies online were America Online (2.6 billion impressions) and Netscape (1.6 billion).

Amazon's hold on the top online ad spot is due in part to the substantial investment the company has made in its direct and brand marketing campaigns in recent months. A separate report released last week by AdRelevance found that Amazon continues to surpass all advertisers in spending, dropping $61.8 million during December alone -- a figure more than double the next highest ad spender.

The January AdRelevance Intelligence Report analyzes the online media buying activities of small, mid-sized and large companies based on the measurement of impressions, spending, unique ads and messages during the fourth quarter of 2000. The research figures include impressions for all banner and button types, and exclude in-house advertising.