NEW YORK — Never mind AOL's current dismal performance. Online advertising is doing fine … really. Just ask the guys with a vested interest in selling it.
The Online Publishers Association held a luncheon here yesterday in an ongoing effort to correct what it claims are common misperceptions about the sector's vitality.
Geoff Ramsey, president of New York research aggregator eMarketer, began the luncheon by reiterating that his firm predicts online ad spending will grow 11 percent in 2002, making up for an 11 percent decline in 2001.
The luncheon followed a Wall Street Journal article in which Lehman Brothers analyst Holly Becker predicted that overall online advertising would decline 13 percent this year on top of last year's 13 percent decline.
Estimates of last year's ad spending vary wildly.
The article attributed AOL's ad slump to its inability to serve “jump-off-the-screen advertising that is leading the industry.” As a result, the Journal reported, “While AOL still sells nearly half the ads sold online, it says its ad revenue could fall as much as 33 percent this year to $1.8 billion from $2.7 billion last year.”
Ramsey said Becker's negative prediction for online advertising “is probably an overreaction to AOL.” Reasons for eMarketer's growth predictions include:
· The Internet audience in the United States, defined as people who use the Internet at least once every 30 days, grew from 124 million in 2000 to 152.8 million in 2002.
· People are also spending more time online, Ramsey said: 6 hours, 52 minutes at work and 3 hours, 30 minutes at home per week in January 2002 compared with 5 hours, 39 minutes at work and 2 hours, 45 minutes at home in January 2001.
Ramsey predicted that the number of broadband households in the country would almost double from 17.6 million in 2002 to 34.7 million in 2004.
He also reiterated findings that contend Internet users spend less time with other media compared with non-Internet users. The Internet is largely responsible for a 20 percent decline in magazine use, Ramsey said.
As a result, CondeNet sees a chance to put competitors out of business.
“With the growth of the Internet, we see an opportunity to knock out the tertiary players,” said Sarah Chubb, president of CondeNet, publisher of Epicurious.com, Concierge.com and Style.com.
“If they're reading Epicurious online, they won't have time to subscribe to the No. 2 and No. 3 books,” she said during her part of the presentation.
Chubb said that 75 percent of CondeNet's online subscribers in the food category were not in Conde Nast's databases, meaning the Internet is not cannibalizing offline brands. She also said that online ad sales on CondeNet are up 70 percent over last year.
Reeling off more don't-sell-us-short numbers, Merrill Brown, senior vice president and editor-in-chief of MSNBC.com, said that on a busy news day the site delivers news to 4 million people.
“That's not 4 million clicks … that's 4 million people,” he said. “We are larger than daily newspapers by many, many metrics.”
Brown said that 55 percent of MSNBC users log on with connections higher than 56k.
Internet users on average spend 1.5 minutes with an on-demand video and 8 minutes with a live news Webcast, he said.
“That's a number that gets us to comparability with other media and a number we think is encouraging,” he said. “We think the advent of [online] video advertising is here.”
To move ahead, publishers and their advertiser clients must work close together and be flexible, said Chris Schroeder, CEO/publisher at Washingtonpost.Newsweek Interactive.
“You can't be captive to the cultures you come from,” he said, citing an unnamed client who sees severe drop-off in leads once respondents hit the advertiser's landing page because it is filled with impenetrable legalese.
He also said advertisers and publishers should not be afraid to experiment.
“I can change a font from red to blue and I will get 250 e-mails that day complaining about it, but it's up to us as an industry to move forward,” he said.
Schroeder noted that 80 percent of traffic to washingtonpost.com comes from outside the newspaper's local area.
Schroeder also predicted a spike in advertisers interested in placement by time of day.
The year-old Online Publishers Association's other members include ESPN.com, Forbes.com, New York Times Digital, Salon, Slate, Tribune Interactive, Wall Street Journal Online and weather.com.
