Market Correction Won't Deter Dot.com Spending - Brief Article - Illustration - Statistical Data Included

Although there may now be some "softness" in ad sales.

* Ad spending on Internet-focused publications was through the roof in April, according to the Publishers Information Bureau. And despite the market downturn in April among many of the Internet companies--whose ad dollars have helped to fuel such phenomenal growth--industry sources say they expect the good times to roll right along.

Ad revenue for Internet-based titles was, to put it mildly, astronomical in April. To wit: The Industry Standard had a 973 percent increase ($14 million) compared to the same time period last year ($1.3 million). Its competitors had nothing to sneeze at, either: Ad revenue for Business 2.0 was up 714 percent ($5.9 million) compared to 1999 ($734,865), while Red Herring's ad revenue increased 514 percent ($6.3 million), compared to last year's figure of just a shade above $1 million.

But most, if not all, of those ad sales were cemented prior to the market correction. Might the dot.com gravy train now get derailed? Unlikely, say sources.

"The big Internet spenders--Yahoo! Microsoft--aren't cutting back," says Gene DeWitt, chairman of the New York-based ad agency Omnimedia (formerly DeWitt Media). The Internet companies that got hurt "were flashes-in-the-pan. In terms of total ad spending, they'll be a blip on the screen," he adds. "The froth went off the head of the beer a little, but the glass isn't going anywhere."

Others on the buy side see a slight downtick in ad sales among the Internet bibles. "There might be a little softness [in ad sales] correlating to the air that was let out of the balloon," says Alan Jurmain, executive vice president and director of media services at NewYork-based Lowe Lintas & Partners.

One fallout from the recent market gyrations, says Chris Alden, chief executive officer of Red Herring Communications, may be a consolidation in dot.com ad spending--but nothing to be unnerved about.

"A lot of the hollow dot.coms focused on their ad budgets rather than their business plans," says Alden.

He adds: "But I don't think the spending will reverse. It may flatten out, but there's still a huge need for Internet companies to advertise in these vehicles."

April Ad Dollar Growth Up 17%

Ten of 13 major advertising categories pumped more money into print in April, most notably in technology, media and advertising, and financial, insurance and real estate. On the downside: direct response companies, cigarettes and Detroit.

CLASS                                      1999         2000     %  1999
NAME                                    DOLLARS      DOLLARS   CHG PAGES
AUTOMOTIVE                         $540,539,312 $512,059,092  -5.3 7,183
TECHNOLOGY                         $391,471,781 $476,581,226  21.7 6,394
DRUGS & REMEDIES                   $312,334,492 $368,975,305  18.1 3,645
DIRECT RESPONSE COMPANIES          $426,229,264 $361,189,255 -15.3 8,529
TOILETRIES & COSMETICS             $317,305,018 $360,798,956  13.7 4,176
APPAREL & ACCESSORIES              $335,943,063 $359,302,582   7.0 7,910
FINANCIAL, INSURANCE & REAL ESTATE $272,739,228 $348,158,246  27.7 4,773
RETAIL                             $175,284,302 $342,086,009  95.2 3,764
FOOD & FOOD PRODUCTS               $287,095,041 $341,695,254  19.0 2,748
MEDIA & ADVERTISING                $248,548,985 $334,897,723  34.7 3,292
HOME FURNISHINGS & SUPPLIES        $303,521,104 $332,479,648   9.5 4,447
TRANSPORTATION, HOTELS & RESORTS   $252,671,689 $260,847,257   3.2 5,349
CIGARETTES, TOBACCO & ACCESSORIES  $138,293,737 $155,678,635  12.6 1,826
CLASS                               2000     %
NAME                               PAGES   CHG
AUTOMOTIVE                         6,719  -6.5
TECHNOLOGY                         9,074  41.9
DRUGS & REMEDIES                   4,002   9.8
DIRECT RESPONSE COMPANIES          6,679 -21.7
TOILETRIES & COSMETICS             4,570   9.4
APPAREL & ACCESSORIES              8,078   2.1
FINANCIAL, INSURANCE & REAL ESTATE 5,742  20.3
RETAIL                             6,500  72.7
FOOD & FOOD PRODUCTS               3,135  14.1
MEDIA & ADVERTISING                5,032  52.9
HOME FURNISHINGS & SUPPLIES        4,674   5.1
TRANSPORTATION, HOTELS & RESORTS   5,434   1.6
CIGARETTES, TOBACCO & ACCESSORIES  1,923   5.3
SOURCE: MPA

COPYRIGHT 2000 Copyright by Media Central Inc., A PRIMEDIA Company. All rights reserved.
COPYRIGHT 2003 Gale Group