Internet

Online ads pull in Fortune 500 fans

A new study shows that many of America's largest businesses are advertising on the Internet, a trend that could portend a rebound for the industry in 2003.

A new study has shown that more Fortune 500 companies are advertising online, a trend that could portend a rebound for the industry next year.

In the fourth quarter of 2002, a total of 286 companies from the Fortune 500 list of the United States' largest businesses introduced ad campaigns online. That compares with 270 during the same period the year before, according to AdRelevance, a division of market researcher Nielsen/NetRatings. The percentage change year over year was 6 percent.

"Fortune 500 advertising has grown steadily in the past year, as large traditional advertisers are discovering how the online medium can be used to reach desirable target audiences," Charles Buchwalter, vice president of client analytics for Nielsen, said in a statement.

"The stage is set for the Web's share of these companies' marketing budgets to increase throughout 2003," he added.

After several years of exponential growth, the Internet advertising industry underwent severe setbacks, stemming from the technology stock market crash in April 2000. Since that time, ad sales have been on a downward spiral for many Web sites, and the industry has struggled to regain its edge.

For example, in the third quarter of 2002, Web advertising sales totaled $1.47 billion, up 1 percent from second-quarter sales but an 18 percent drop from the third quarter the previous year.

While the report says that more Fortune 500 companies are advertising online, those companies do show a strong link to technology. Seven of the top 10 advertisers in the fourth quarter were technology-related businesses.

Amazon.com, No. 492 on the Fortune 500 list, ranked as the chief online advertiser in the fourth quarter, delivering 12.2 billion ads, or impressions, during the holidays. The company's ad ranking was followed by No. 2 online advertiser Estee Lauder, which is No. 360 on the Fortune 500 list. The cosmetics company primarily promoted its Web site Gloss.com over the holidays.

Others on the top 10 list, in order of their ranking, were: USA Interactive, SBC Communications, Barnes & Noble, Dell Computer, Hewlett-Packard, Bank One, AOL Time Warner and General Motors.

Rich media advertising, or advertising with video or audio, is also drawing a big crowd of traditional marketers, according to AdRelevance. Half of the top rich media advertisers last quarter were Fortune 500 companies, the research firm said. Those included HP, SBC and Microsoft.

"After a challenging two-and-a-half years for the online advertising market, the increasing involvement of the nation's largest advertisers provides a much-needed shot in the arm to the online medium," Buchwalter said.