Smaller Firms Buck Decline in Web Ads
April 8, 2002
Web advertising by mutual fund companies declined markedly by about 70% between December 2001 and January 2002, according to data from Jupiter Media Metrix, a Web research firm based in New York. But the plummet may be more the result of a few giant companies scaling down their Web campaigns than a massive pullback by the industry as a whole. In fact, a number of executives say they continue to see the Web as a compelling, and often cheap, way to round out their advertising strategies.
Jupiter said that advertising on the Internet by firms offering mutual funds and IRAs declined from 89.5 million impressions, or the number of times an ad is viewed on a Web site, in December of 2001 to 27.6 million impressions in January of this year.
The decline was largely due to a recent scaling down in Web advertising by Fidelity Investments and the Vanguard Group, a spokesman at Jupiter said. Vanguard, which was the top Web advertiser among mutual fund firms in December 2001, scaled down its advertising. Fidelity, which had been the second biggest advertiser, has also cut back on its Web advertising, the spokesman said.
Neither firm would comment on their decline in Internet spending.
Cheap Cost of the Web
Still, plenty of firms are continuing to push their funds and other financial services on the Web. ING Group of the Netherlands, for one, has become a ubiquitous presence on sites offered by The New York Times, CBS Sportsline and nearly a dozen other online venues.
Tom Daly, ING's VP of Web strategy, said the firm decided to promote itself solely through the Web for the first quarter of this year. The reason, at least partly, is cost. Following the bust of the Internet craze, many Web companies are offering dirt-cheap rates to advertisers.
In fact, Jim Atkinson, who heads a Los Angeles marketing firm called Orbis Marketing Group, said some sites are charging only $1 per CPM, or cost per 1,000 viewers, a common way to measure advertising expense and reach. That, he said, is only a fraction of what most print advertisers charge.
"It's a good market right now. It's competitive; it's rational for us," Daly said.
"It's probably closer to a buyer's market."
"It's not as expensive as some of the other [media]," agreed Peter Hayes, director of corporate marketing at Mellon Financial Corp. of Pittsburgh, which is also running Web ads. Big-name sites such as CNN.com still charge "a fair amount, but others will put it out there for free if you ask them," he joked.
Mellon's Web advertising makes up "a smaller proportion" of its new campaign, which also includes print and television spots, Hayes said. [See p. 1.] The company is advertising on CNN.com, FoxNews.com and several other sites.
In making the decision, Daly said his firm isn't worried about its ads' "click-through rates," or the number of times users click on an ad that links to a company's home page. Instead, the firm primarily is satisfied using the Web as a branding tool, Daly said. ING wants to "get the logo up there and have people see it and understand that we are a financial services provider," he said.
"Given the product mix that we have - annuities, insurance and mutual funds - we needed to begin a process of building awareness of the ING name," he continued. "The Web is a great branding tool."
While ING and Mellon are advertising on mostly general news and sports sites, Jupiter said most fund companies are advertising on such portals, or Internet gateways, as Yahoo, Google and MSN. Business and finance sites proved second-most popular among fund advertisers. General news sites were third.