Net ads increase, but how much?
Nothing is certain about advertising on the Net. The number of hits an ad gets, its design, and placement on the page are all bones of contention between the powers that be. Now, analysts cannot even agree on how much money is being spent.
A new report by brokerage firm Hambrecht & Quist today released figures indicating yearly advertising revenue will soar to $3.8 billion by the year 2000--far above this year's projection of $300 million and last year's revenues of $12 million, according to the report.
But other organizations, from Jupiter Communications to Simba Information, yielded numbers that show a vastly different picture.
"The Internet changes everything, and that changes business models and projections," said Daniel Rimer, an Internet analyst for Hambrecht & Quist. "What is interesting is not how different the numbers are, but whether they're moving in a similar range. Whether it's $3 billion, $5 billion, or $8 billion in advertising, it's all huge growth."
Rimer said his 1996 figures were based on public companies that have Internet advertising models in their business plan and the number of advertising content-related companies in the private sphere. Projections for the year 2,000 came from the anticipated growth of consumers logging on to the Internet and the rise in advertising networks.
Peter Storck, a senior analyst with Jupiter said he agrees Internet advertising is growing. But he noted that it will continue to represent only a small portion of all advertising through the year 2,000.
"TV advertising will reach $50 billion by the year 2,000 and print advertising will be $30 billion," Storck said. "But it will surpass radio, which will be $2 billion by then. In fact, we project it will match radio advertising by 1998."
A cross-pollination is also occurring in the areas of Internet and traditional advertising. While established content and service companies like Disney are using the Internet for their advertising, Rimer noted, Internet companies such as Yahoo and CNET: The Computer Network are using traditional vehicles like magazines and newspapers to build their presence and customer base.