Survey: Big Jump in Big Brand Net Ad Spending

A new survey from the Association of National Advertisers (ANA) shows that total Web advertising spending by its member companies has nearly tripled.

The ANA — a trade association whose 292-company membership includes such heavy hitters as American Express, BMG Entertainment, IBM, Intuit, Nortel, Sony, Sprint and Symantec — released results of its fourth annual survey, “Web Site Management and Internet Advertising Trends” on Tuesday.

According to the survey, the number of ANA members advertising online in 1999 rose by just 3 percent — from 61 to 64 percent — but online advertising spending levels grew almost three-fold to an average of $1.94 million (US$) per company.

At the same time, the number of Web sites per company rose by 41.9 percent, to an average of 6.1 from 4.3. The survey generated 208 responses from 114 member companies during the first two months of this year. The respondents are classified by ANA as “traditional marketers” who have been apprehensive about moving their businesses onto the Internet.

New Reasons for Using the Net

The survey results also indicate that the companies’ reasons for using the Internet are changing. For example, 45 percent of the respondents said they used the Internet to provide product and service information — a percentage that was down 12 points from 1999. However, using the Internet to develop and improve brand loyalty was up by 12 percent to 40 percent.

Significantly, using the Internet for the purpose of providing customer service also increased 11 points to 36 percent. “That shows an increased appreciation in the value of a long-term customer,” ANA executive vice president Robin Webster said.

The survey findings also indicate that customers are being acquired through e-mail, co-marketing alliances and other communication methods found largely on the Internet, according to Webster.

Advertising Impact

“Web marketers are dealing with a host of new challenges — from integrating online and offline marketing plans to managing channel conflict and generating revenues from their Web sites,” said Webster.

Many of the companies surveyed are dubious about the impact of online advertising. Thirty-five percent of the respondents expressed concern about weak viewer involvement and low click-through levels. Twenty-nine percent of respondents are not convinced that online ad formats, such as banner ads, lack the necessary impact to persuade consumers.

Even with those concerns, however, 60 percent of the surveyed companies said they are building databases to market their products and services. Despite any misgivings they may have about the medium, half of the companies that do not currently sell online expect to do so in the future.

Privacy Concerns

The ANA study also explored privacy concerns. The majority of respondents reported that they collect data from their online advertising and marketing efforts. Of those, 84 percent said they link their privacy policies to a statement posted at the Web site where they collect the data.