Brought to You by . . . Anyone?
Wednesday, June 18, 2008
One of the nation's leading sponsors of online media, Rob Wrubel lays out as much as $20 million a month for Internet ads. Over time, his firm's ad buys have supported a wide spectrum of Web content, from video clips of rock bands to coverage of the Iraq war, and an array of online names: Facebook, Google, Yahoo, CBS, MySpace and CNN.
Wrubel manages ad spending for the University of Phoenix, a for-profit college that paid more for online display advertising in the United States than any other business over the past year, according to statistics from TNS Media Intelligence.
"We are, in fact, everywhere," said Wrubel, who is chief executive of Aptimus, the online ad outfit owned by the university's parent company. He compared their spots to "carpet bombing" and said that "someone once calculated we accounted for 1/64 th" of all online advertising.
Yet the fact that the University of Phoenix, a relatively small player in the world of advertising, ranks at the top of Internet sponsors also highlights what for many online media businesses is a grim economic reality: The biggest U.S. advertisers, which have long supported other formats -- television, radio, print -- have not fully embraced the Web.
So while print and video outlets face enormous pressure to transfer their wares to the Internet, many in the industry wonder where the money to support online content will come from.
The nation's largest advertiser, Procter & Gamble, which spends nearly $5 billion a year on advertising, devoted less than 2 percent of its measured ad spending online, according to figures from the 2007 Advertising Age list of leading national advertisers. The company spent most of its vast ad budget on television.
The University of Phoenix and its parent company, Apollo Group, by contrast, spent $278 million on advertising last year, most of it on the Web.
"While spending on Internet marketing has been growing dramatically over the past decade, the top 50 or 60 brand marketers are very much underrepresented," said Randall Rothenberg, president and chief executive of the Interactive Advertising Bureau, a trade group. So far, the online industry has been "growing by grabbing the low-hanging fruit."
As with television, radio and other media, advertising dollars will shape what is and what isn't available on the Internet.
There are, to be sure, billions to be garnered from online advertising -- about $21 billion last year in the United States, according to the Interactive Advertising Bureau. And analysts expect that figure to double or more in the next decade.
Yet for all the growth in online advertising, there are some doubts that the advertising revenue available is enough to pay for the kind of content -- articles, videos, etc. -- that Internet visionaries have predicted.
For one thing, the largest chunk of money spent for online ads is in search advertising, those little text ads that run beside search results. These ads do not directly benefit companies putting information online. Instead, the money from search advertising is reaped by the search engines -- Google, Yahoo and Microsoft -- that run them.