Leading E-Commerce Companies Spending More on Marketing

Leading Internet commerce companies spent an average of $29.8 million
building their brands and driving traffic to their sites during the first
three months of 2000, says a report released Thursday from the eCommerce

The Intermarket Group ,
publisher of the eCommerce Almanac, says it profiled more than 80
business-to-consumer and business-to-business e-commerce companies, and
found a median first quarter sales and marketing budget of $21 million.
This, Intermarket said, compares with a median sales and marketing budget of
$34 million for all of 1999 and only $6 million the previous year.

But although the report found total advertising and marketing spending
reached new highs
among profiled companies, it also found that the share of top-line revenue
allocated to sales and marketing declined during the quarter by 36 percent
from fiscal year

According to the report, the top five sales and marketing budgets among
Internet commerce companies for the first three months of 2000 were: E*Trade Group $177.5
million; Amazon.com
$140.1 million;
Charles Schwab & Company
$100.9 million,
Ameritrade Holding
$54.8 million; and Priceline.com $40.4

Intermarket said “offline advertising” now accounts for a sizable share of
sales and marketing expenditures at the leading Internet commerce companies.
The most popular offline media are television, which is used by 75 percent
companies, followed by radio (68 percent), consumer periodicals (53
percent), newspapers
(52 percent), and direct mail (52 percent).

America Online is the
most common online marketing partner, the report showed. More than one-half
of the companies tracked by the eCommerce Almanac have made marketing deals
with one or more AOL properties. Other popular portal partners include Yahoo! and
Microsoft’s MSN portal .

The most popular marketing partners among leading Web destinations and
services are Netcentives’ ClickRewards
, Amazon.com, and Giftcertificates.com .

The median customer acquisition cost among companies tracked by the
eCommerce Almanac is $78. The largest proportion of companies invest
between $10 and $49 to acquire each new customer; a slim majority of the
companies (51 percent) invest $100 or less per new customer while
approximately one in twelve invest $500 or more.

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