Showing a stiff upper lip in the face of constant skepticism and the biting critiques that accompany each new ad model, Web publishers may soon be laughing all the way to the bank. Online ad revenues totaled some US$217.3 million in the first six months of this year, up 256 percent from the first six months of 1996, according to a report released Thursday by Cowles/Simba.
Revenues may dip next quarter, but will be "booming" with fourth-quarter holiday advertising, said Mathew Kinsman, editor of the Electronic Advertising & Marketplace Report.
Intel will single-handedly feed as much as $75 million into Web advertising next year, according to projections by Advertising Age. The company, which operates what it has deemed the "largest ingredient cooperative advertising program in the world," has provided $3.4 billion since 1991 in matching funds to PC manufacturers promoting "Intel Inside." Now the chipmaker is adding the Net to its co-op advertising program, which previously included only print and broadcast ads.
"There has been a tremendous rise in the Web as an advertising medium," said Intel spokesman Adam Grossberg, who explained that one of the reasons the company is incorporating Web advertising into the Intel Inside campaign is to satisfy "the desire by some of the licensees to have more media flexibility."
Intel gives PC makers a 6 percent rebate to use on advertising and, starting in January, anywhere from 0.6 to 1.8 percent will be available to spend on Web ads. In a short-term promotion, Intel is inviting PC makers to spend as much of the 6 percent as they want in Web advertising between September and December.
The EAMR report, which tracked 17 top Web sites, showed that search engines are still the Number One earner of ad revenues, with 45 percent of the market. Tech news sites come in second at 35 percent.
In another recent study, the Internet Advertising Bureau showed Web ad revenue growth between the first quarter of 1997 and the previous year at an impressive 333 percent. Showing reported revenues of $129.5 million for the first quarter, the IAB report puts ad sales up 18 percent over the previous quarter. And the number of companies that have joined the IAB - which consists mainly of ad agencies and new-media companies - has tripled since last September, from 70 to 215 members.
Still, not all analysts buy the idea that advertising is all that Web publishers would make it out to be. Almost every new ad model - be it rotating, interactive, or a take-over-your-whole-browser Web commercial - gets a thorough going-over from those who see new media as trying desperately to make the impossible work.
"We haven't seen an advertising-based business model that works yet," said Barbara Ells, an analyst at Zona Research, who pointed out that even Yahoo, one of the few Net companies turning a profit, still wouldn't make it on advertising alone.
