CREATION: Investment houses slash regional online adspend predictions

<p>Two major investment houses have cut online adspend forecasts for </p><p>Asian markets, with one warning that the region faced the same woes as </p><p>its US counterpart. </p><p><BR><BR> </p><p>Nikko Salomon Smith Barney lowered previous forecasts of online adspend </p><p>in Japan for 2003 by a sharp USdollars 700 million to total just </p><p>USdollars 2 billion. </p><p><BR><BR> </p><p>It also noted 2001 revenues and earnings would not meet previous </p><p>forecasts. </p><p><BR><BR> </p><p>However, it added the online adspend problems in Asia were significantly </p><p>different to those experienced by large dotcoms, such as US-based </p><p>Yahoo. </p><p><BR><BR> </p><p>Internet firms in Asia have only one-half of one per cent of the </p><p>advertising market, compared to two or three per cent in the US, the </p><p>report said, adding that the level of online ad spending per person in </p><p>Asia was insignificant compared to the United States. </p><p><BR><BR> </p><p>Another investment house, Credit Suisse First Boston, said overall ad </p><p>spending per person in China amounted to just USdollars 3 in 1998, </p><p>compared to USdollars 437 in the United States. </p><p><BR><BR> </p><p>The growth of online advertising for Asia, excluding Japan, was </p><p>USdollars 175 million in 2000, and was expected to reach USdollars 387 </p><p>million in 2001, according to Nikko Salomon Smith Barney. </p><p><BR><BR> </p><p>Merrill Lynch also cut its forecasts for online ad spending in China </p><p>from USdollars 120 million to USdollars 80 million for 2001. </p><p><BR><BR> </p><p>Analysts noted the Asian online advertising industry was at an infant </p><p>stage. As the Internet matures in the region, advertisers would become </p><p>more aware of the Web as an effective tool for gathering market </p><p>data. </p><p><BR><BR> </p><p>However, despite all the bad press, Jupiter Media Metrix said online </p><p>advertising, including word-of-mouth publicity and direct marketing and </p><p>promotions, were still successful in attracting new visitors to </p><p>websites. </p><p><BR><BR> </p><p>The Jupiter report found the majority of the top 25 new websites last </p><p>year were pure play business, lacking the backing of "big-name" </p><p>companies. </p><p><BR><BR> </p><p>It added that websites were adopting varied techniques to boost traffic, </p><p>such as requiring new visitors to register on sites in order to collect </p><p>email address for direct marketing purposes. </p><p><BR><BR> </p>