ON-LINE AD DIRECTOR BETS ON NEW MEDIUM.

Byline: Warren Wilson Seattle Post-Intelligencer 

Rich LeFurgy made the leap in June, forsaking New York City and the security of 17 years with a top-20 advertising agency for a little company called Starwave and a new medium called Internet advertising that didn't even exist a couple of years ago.

Risky? Perhaps. The Internet is about as far from a proven ad medium as you can get. Advertisers aren't seeing much return and few people are actually buying over the Internet. The entire medium may total $50 million in revenue this year, a tiny droplet in the ad industry's $100 billion-plus bucket.

But LeFurgy believes the uncertainties of Internet advertising pale alongside its potential. So strongly does he believe that he wasted no time applying when he heard about Starwave's partnership with ESPN to create a sports-news service on the Internet's World Wide Web.

After a few phone calls and an interview process that included a lunchtime Ultimate Frisbee session, he landed the job of advertising director of Starwave at Bellevue in the Seattle area. It is one of several "new media" companies backed by Microsoft co-founder Paul Allen.

Barely six months later, LeFurgy has signed up a raft of big-name brands - from Pizza Hut to Levi Strauss to AT&T - and has helped build ESPNET SportsZone into one of the top publishers of Internet ads.

Both he and Starwave exemplify the enthusiasm the Internet is inspiring as a commercial medium unlike any other. The medium is both broad and narrow at the same time - capable of reaching millions of people, but also able to target an audience more precisely than any other.

"It's an unheard-of combination," LeFurgy says, describing it as a medium in which an advertiser "can have brand-building and direct marketing in the same space."

A new survey by WebTrack Information Services estimates that Web advertisers will spend $12.4 million in the fourth quarter of this year. Surveying more than 175 Web sites that solicit paid advertising, researchers found more than 250 active advertisers with budgets ranging from $5,000 to more than $500,000.

The largest publishers of Web advertising, the survey said, include Netscape (with estimated revenue for the quarter of more than $1.7 million), the Lycos, InfoSeek and Yahoo "search engines" (which help Web users find the information they're seeking), Time Warner's extensive Pathfinder service and Starwave's ESPNET SportsZone.

Starwave's SportsZone is notable in a couple of respects. For one thing, its advertising rates are much higher than most. A three-month "sponsorship" on ESPNET costs $100,000, compared with $30,000 on Pathfinder or $60,000 on Yahoo or Lycos.

It also is one of the few top publishers (along with Pathfinder and HotWired, the Web version of Wired magazine) that viewers find interesting or valuable enough to seek out. ESPNET records some 930,000 "visits" per week, and delivers more than 7 million "pages" of sports information - news, opinion columns, trivia and reams of statistics.

The same model underlies its other offerings: Outside Online, a partnership with Outside magazine that began in March, even before ESPNET; an entertainment-oriented service called Mr. Showbiz that began in May; Family Planet, which began Oct. 7; and its newest, a partnership with the National Basketball Association called NBA.com, that was launched Nov. 3. (All can be found at http://www.starwave.com.)

Each service aims at a specific, motivated audience, LeFurgy said.

"We talk to people's passions," he said. In that way, Starwave can "generate specific audiences that are very passionate and involved with our services."

Other big publishers also attract advertisers because of their large numbers of viewers, but they are based on entirely different models.

Netscape, for example, has a large audience simply because its browser is far and away the most popular, and it is programmed automatically to present Netscape's home page when a user connects to the Internet.

Similarly, the search engines such as Lycos and InfoSeek are seen by millions of people on their way to somewhere else.

That's a key point, LeFurgy said.

The search engines draw large numbers of viewers, but their visits are typically short.

"Our users are more involved in the content," he said, so their visits tend to be longer. The average ESPNET viewer spends 13 minutes in the service. As a result, he said, "We think our impressions are more valuable."

The other key element of the content model is that it targets a specific audience.

The ESPNET audience, for example, is 95 percent male.

"That's just unheard of in traditional media," LeFurgy said. Even ESPN's cable-television service, which in the broadcast medium is considered the best way to target males, has an audience that is only 72 percent male.

Family Planet, on the other hand, attracts more females.

"We're really at the leading edge in attracting women to the Web," LeFurgy said.

High-tech industries, not surprisingly, are among the first to embrace the new medium.

According to the WebTrack survey, about two-thirds of recent Internet ads were for Web sites or service, computers or computer equipment, or telecommunications.

As in any medium, Internet ads must be compelling if they are to succeed. But the Internet isn't limited in space, as newspapers and magazines are, or in time, as are television and radio. Companies are experimenting with those new freedoms in some creative ways.

LeFurgy says he and Starwave have faced a lot of skepticism on Madison Avenue.

"People didn't really know how to value what you were getting by advertising on the Web," he said. "A lot of people kind of smirked when they saw our ad rates."

By and large, it is too soon to assess the success of Internet ads.

"I don't know how many brands are able to quantify the value of this in real hard dollars," he said.

But more and more big firms - not just AT&T and Levi Strauss but Toyota, Motrin and Gatorade - are signing up.

Microsoft is spending about $1 million a year on Internet ads, WebTrack said.

One observer, The Kelsey Group, predicts that U.S. companies will spend $200 million on Web advertisements next year, and other estimates suggest the figure will reach $1 billion by 2000.

LeFurgy plans to help."When I called Starwave, I said I really believe in this medium to do all the things I think are important - create a brand image, provide in-depth information about the brand, and be a vehicle where people can communicate directly between the brand and the user," he said.

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Photo (Color) Rich LeFurgy shares offices with sports cutouts at an on-line advertising firm. Associated Press