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ADVERTISING : E-commerce sets hot pace for advertising.

Online companies' surge in ad buys leads robust results across most industries in 1st quarter

Advertising spending in all forms of media continues to grow robustly across most industries, with explosive spending hikes racked up by Internet companies, according to spending calculations for the year's first quarter made by Competitive Media Reporting, a leading research firm.

Advertising in all media increased 4.6% to $19.1 billion in the first quarter, compared to $18.3 billion during the same period in 1998. And the spending during last year's first quarter represented a big 12.4% advance over the previous year.

The biggest spending jumps during the quarter were those made by companies with online businesses, which climbed to $284.2 million in spending, a leap of 183.1%.

The top online spender was AT&T, which forked over $32.1 million, a fat 21.9% increase.

The rate of growth in spending by some other online firms was eye-popping: America Online increased spending to $21 million, up 118.8%; Microsoft spent $17.5 million, a jump of 225.5%; General Electric anted up $15 million, up 8,118.1% (no, reader, your eyes do not lie).

The top online advertised brands were led by AT&T Business Network On-line with $16.1 million, up 41.1%. The biggest growth among the online brands was racked up by No. 4, which spent $14 million, up 7,568.7%.

The Internet Commerce Briefing, a 112-page book which can be ordered from, reports the Web's top 100 e-commerce sites spent an average of $8.6 million last year to generate Web site traffic and build their online brands.

The $195 book, offered only in print, lists the top online marketing budgets last year: Inc, $133 million; E-Trade Group Inc., $71.3 million; and Barnesand Inc., $70.4 million.

The publication reports 86% of the e-commerce sites sites now buy ads in traditional media. Many online advertisers used multiple off-line media, with 55% using newspapers, the top choice.

Economics teaches that what can go up can also go down, and there is evidence that the maxim survives. Stock prices of some online high fliers have dropped, at least temporarily, from highs for the year.

For example, Yahoo! is down 46% from its April peak, according to calculations published July 28 in The New York Times. America Online was down 44% from its April high; Dell Computer declined 23.4% from its February high; and Microsoft is off 11.8% from its July 19 high.

An area of decline was beer. Leading spender Anheuser-Busch budgeted $96 million, down 13.6%. Second-ranked Philip Morris, which slapped $31.9 million down on the ad bar, slid a steep 42.7%.

(Editor & Publisher Web [Caption] (copyright: Editor & Publisher July 31, 1999) [Caption]

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Comment:ADVERTISING : E-commerce sets hot pace for advertising.
Author:Nicholson, Joe
Publication:Editor & Publisher
Geographic Code:1USA
Date:Jul 31, 1999
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