A Slow Start for Online Holiday Advertising

Although online advertising action for this holiday season is nearly four
times what it was last year, online advertisers are off to a slower start,
says a new industry report.

The study by AdRelevance, a Jupiter Media Metrix company, shows
that while the number of retailers advertising online this season (2,313)
almost quadrupled from 1999 (657), ad impressions are growing slower.

In fact, the study found that total median impressions per retailer are down
and the number of holiday-themed ads in October 2000 was less than half of
what it was last year.

Meanwhile, Jupiter Research reported that a separate executive survey found
that 64 percent of e-tailers are making online media their top priority for
advertising campaigns this season.

Only 21 percent of online retailers said they plan to advertise in print
media and a mere 12 percent will advertise on radio, television and cable TV
this holiday season, Jupiter said.

According to Jupiter, online retailers who over-spent on holiday advertising
last year are taking a far more conservative approach this year, with only 11
percent planning to spend more than half of their ad budget on this year’s
holiday season — compared to nearly one-third (29%) last year.

Jupiter said it is advising online retailers not to focus on price promotion
and discounts, but to base their marketing on service, convenience and

“Marketers have learned from last year’s experience and this year have
redistributed their online holiday budget and developed much more targeted
and efficient marketing campaigns using more measurable media channels,” said
Marissa Gluck, senior analyst, Jupiter Research. “Although Internet shoppers
have been spoiled by discounts in the past, during the holiday season they
are more concerned with receiving their orders before the holiday, saving
time and avoiding crowds than they are with saving on price.”

The AdRelevance Holiday 2000 Intelligence Report, which tracked
holiday-related online advertising from October through mid-November, found
that online holiday ad impressions and spending by retailers did not post
gains above last year until the second week of November 2000.

Total median online ad impressions per retailer were down 82 percent in
October 2000 — falling from 130,000 impressions in 1999 to 23,000 this

Interestingly, only five of last year’s top 10 holiday advertisers show up in
this season’s rankings: Ubid, Yahoo!, eBay, barnesandnoble.com and

Barnesandnoble.com, which ranked sixth last year among top holiday online
retail advertisers, this year increased its share of the online ad pie by
nine percent — becoming the second largest online holiday advertiser behind
Amazon.com, the study said.

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