Mixed news for online advertising
Charles Buchwalter, VP, AdRelevance
While commercials during Super Bowl XXXV next month will star Budweiser, beer munchies and a host of other household names, dot-com companies will be playing only second string in television's most watched sporting event.
Earlier this year, flush with cash and Wall Street celebrity status, 17 Internet companies strutted their stuff during the 34th annual championship game. But months later, many got sacked by the market downturn and investor cynicism.
So far, only a handful of Internet-related companies have signed on to advertise during the upcoming Super Bowl, and CBS representatives say they expect dot-com companies to constitute only 10 percent of the lineup for January's game, compared with 40 percent last season.
"The dot-coms were a one-hit wonder," said Tony Taranto, vice president of National Football League sales for CBS, which is airing the game Jan 28. CBS said it expects to draw more than 130 million viewers.
"Last year the Super Bowl got them the notoriety they wanted--Pets.com is a perfect example of that--but once they got the customer, they clearly weren't able to hold them," Taranto said.
The drop-off this season is merely a ripple effect of the industry's shrinking ad budgets and countless dot-com closures. While most Internet-related companies are still trying to create buzz about their Web sites, many either do not have the millions to spend on a 30-second TV spot or have turned to more conservative outlets, such as direct marketing or Internet promotions.
For the upcoming game, CBS has "gone back to a more traditional cast of companies," Taranto said. Among them: Anheuser-Busch, PepsiCo, Visa International, Federal Express, Levi Strauss, MasterCard International, Charles Schwab and General Motors, according to individual announcements by the companies.
However, HotJobs.com and Monster.com, two employment Web sites, are back this year. Accenture, formerly Andersen Consulting, and computer services company EDS will have spots in the broadcast. And online brokerage company E*Trade will once again host the halftime show.
Last season's Super Bowl turned out mixed results for dot-com advertisers--many of which experienced a drop in Web site traffic after the event.
Start-up Computer.com, which essentially launched its site on Super Bowl Sunday, spent more than $3 million of its $5.8 million in seed funding to flash three 30-second ads before and during the game. At its peak, the company generated heavy volume. But in the two days that followed, its traffic fell significantly.
Even if dot-coms make themselves heard, there is no guarantee the exposure will translate into profits. Many of last season's Super Bowl advertisers are a cautionary tale.
Epidemic Marketing, which spent about $2.1 million on a 30-second spot last year, according to Competitive Media Research (CMR), belly-flopped only five months later.
"We probably got better leads from the fact that the CEO got to go to the Super Bowl opening party and meet some bigwigs than from traffic the ad generated itself," one former employee of Epidemic said.
Pets.com, which gained quick notoriety because of its googly-eyed sock puppet, spent about $2.6 million with last year's Bowl host, ABC, according to CMR. The company announced last month that it would close its doors after not being able to find a buyer or other financing. The company went public in February and amassed $146.6 million of losses through Sept. 30.
Oxygen Media shelled out about $2.1 million for its "I am a girl" ad promoting its media network of Web and TV programming. The company has since slashed some of its work force and cut the number of Web sites it produces under pressure to make money.
MicroStrategy made a big splash during last year's game, spending about $4.9 million on commercials. This year, the company came under scrutiny from the Securities and Exchange Commission for questionable accounting practices.
Other Internet advertisers from last season's game are trying new advertising models. LifeMinders, for example, has turned to online resources to promote its services, said a company representative, who noted that executives were pleased with the branding effect of its Super Bowl ad.
To compensate for waning dot-com demand this season, CBS is charging more for ads this year, hoping to garner 10 percent to 15 percent more revenue than ABC did in 2000, Taranto said.
"The Super Bowl will bring you the customers, but you have to have a product that people can buy and make a profit," Taranto said.