Online firms refocus ad efforts back onto the 'Net

<p>In an attempt to survive the dotcom shakeout, online firms are </p><p>moving advertising dollars away from relatively expensive advertising </p><p>channels, such as television and newspaper, to advertising on the </p><p>Internet. </p><p><BR><BR> </p><p>While the trend is slowly emerging in the Asia-Pacific region, dotcoms </p><p>in the US have already seen a dramatic change in ad spending. </p><p><BR><BR> </p><p>And, as the once-open bankbooks from venture capitalists steadily close, </p><p>the shift to online advertising makes sense, said Mr Forrest Didier, </p><p>executive director - North Asia, ACNielsen eRatings.com. </p><p><BR><BR> </p><p>Mr Didier told CreATION that the pressure on dotcoms to generate </p><p>revenue, as well as the cost of traditional advertising media was </p><p>leading many to reexamine advertising spending. </p><p><BR><BR> </p><p>"Hong Kong and the region is on the brink of this trend ... There are </p><p>three main reasons why dotcoms are moving away from traditional </p><p>advertising. </p><p><BR><BR> </p><p>"Firstly it is the cost of advertising. And, there is also the pressure </p><p>in the Internet stock market for these dotcoms to show </p><p>profitability. </p><p><BR><BR> </p><p>"They are under enormous pressure. And, this means they must consider </p><p>the cost-effectiveness of their marketing campaigns," he said. </p><p><BR><BR> </p><p>Lycos Asia's general director for Greater China and vice-president for </p><p>sales, Mr James Cheng, agreed. </p><p><BR><BR> </p><p>He said a recent decision by Lycos Asia to place advertising on </p><p>television was withdrawn, due entirely to cost. </p><p><BR><BR> </p><p>"We were supposed to put on a TV advertisement, but when we considered </p><p>the cost and evaluated it, it was too much. So we changed direction. </p><p><BR><BR> </p><p>"Today, dotcoms have to consider their burn rate and it doesn't make </p><p>sense to advertise on TV or newspapers anymore. </p><p><BR><BR> </p><p>"That was only effective when all you wanted was attention, regardless </p><p>of who the target audience was or whether they went to your site," Mr </p><p>Cheng said. </p><p><BR><BR> </p><p>A recent study by AdRelevance reported dotcom advertisers in the US now </p><p>outnumber traditional marketers on the Web by two to one. </p><p><BR><BR> </p><p>In July 1999 dotcom advertisers represented 54 per cent of the top 200 </p><p>online advertisers. </p><p><BR><BR> </p><p>As of June this year, the dotcom contingent made up 68 per cent of </p><p>online advertisers. </p><p><BR><BR> </p><p>The report also found dotcom companies were committing a greater </p><p>percentage of online ad impressions in the second quarter. </p><p><BR><BR> </p><p>And as the carnage of failing websites continues to rise, both Mr Cheng </p><p>and Mr Didier believe the industry will see an increasing number of </p><p>Internet-related firms implement rich media for more effective </p><p>advertising. </p><p><BR><BR> </p><p>"This is another reason, and an additional trend emerging, where dotcoms </p><p>are looking at advertising capabilities," Mr Didier said. </p><p><BR><BR> </p><p>"We are seeing a different type of advertising because of this. </p><p><BR><BR> </p><p>"Disney is already introducing larger, bigger banner ads that allow more </p><p>creativity through streaming of various media. </p><p><BR><BR> </p><p>"This presents more capabilities and puts the focus on cost and </p><p>demographics so these dotcoms can target the right market." </p><p><BR><BR> </p><p>According to ACNielsen eRatings.com, the region (excluding Japan) is on </p><p>the verge of an explosion in online advertising, which is expected to </p><p>total more than US$5 billion by 2005. </p><p><BR><BR> </p>