In Manhattan, you can't walk down the street without seeing a dot-com ad on the side of a building or a bus. In San Francisco, radio stations play one dot-com jingle after another. And televised football games now have more ads for Internet sites than for beer.
Dot coms, or commercial Internet sites--many of which had no advertising budget at all last year--are spending millions of dollars this year on radio, television and outdoor ads as they attempt to break through the jumble of 10 million competitors.
Some of the big players--sites such as AltaVista and Cnet--will spend more than $100 million over the next year to promote their names and new services.
Afraid that they can't muster enough "eyeballs" through online ads to reach the immensely fragmented audience of the Internet, the new online medium has turned to old offline mass marketing--namely, television, radio, print, and outdoor sources from billboards to buses.
They all have the same goal: to sell you everything from toys and sporting goods to information and communication services--and ultimately turn what has been a mostly money-draining business into a profitable one. But first, they have to get you to their sites.
"It's been said that people shop in an online world but live in an offline world," said Jay Mininger, director of marketing for DSports.com. "We need to reach people where they live."
"It's a race to establish a brand identity," said Kevin Flynn, a partner at the Martino Flynn advertising agency in Rochester, N.Y. "It's a little like the wild, wild West, because there's a big gold rush and not everybody will survive. The winners will be those who really break through the clutter."
DSports.com is the online version of Dick's Sporting Goods, a 50-year-old chain of 82 stores that is trying to take its business online. The online version of the bricks-and-mortar stores will spend $15 million--30 times what it spent in the first six months of the year--for a national ad campaign in the last three months of 1999.
Martino Flynn created what it calls "cool, edgy" television ads for DSports.com that feature basketball players who suddenly break into a wordless "Girl From Ipanema," singing "dee . . . dee dee, dee dee . . . dee dee dee." All just to get you to remember the "D" in DSports.
The name game is so vital that many of the ads run by Internet companies never tell you what they do or what they sell. The point is to pique your curiosity so you'll take a look at them.
Outpost.com is five years old. That's centuries in online time. For six weeks leading up to the holidays the online retailer of computers and accessories will spend $4 million to $5 million.
Its television ads last year featured a distinguished gentleman sitting in a library chair telling viewers that in order to get their attention, he'd shoot gerbils out of cannons. The ad got the Outpost name across, but nothing else.
"TV gets your name and image out there, but it's wildly expensive and inefficient," said Bob Bowman, Outpost.com's chief executive. "Our hits increased by 25 percent, but the question is, do they buy and do they come back?"
This year, Outpost.com will remind viewers of the gerbils but will talk about what the site is and why it's different from other online computer retailers. And it is also using online ads to target the specific audiences it wants.
One result of the online advertising frenzy is an increase in ad rates. Rates are up, according to advertising buyers, by 15 percent to 30 percent, depending on the market.
A big winner in the ad sweepstakes is radio. In the first half of 1999, Internet companies spent $90.9 million on radio vs. $26.8 million in the same period last year, according to Competitive Media Reporting (CMR).
In San Francisco, the cost per thousand radio listeners has outpaced the cost for television. In New York, ad time for top-rated talk shows that reach young commuting males--shows like Don Imus's and Howard Stern's--is near television rates.
"It is certainly an important new category," said Gil Schwartz, a spokesman for CBS Inc. "Dot com is an environment of unlimited channels. It is the top-of-mind branded companies that have a chance of punching through."
In the first half of 1999, all online businesses, including portals such as Yahoo and e-retailers such as Amazon.com, tripled their spending on radio, TV, print and outdoor ads, to $755 million, from $230 million in the first half of 1998, according to CMR.
Two major groups are fueling the growth of online advertising: There are the start-ups that might be called "I-just-got-funded-yesterday-and-I've-got-to-get-my-name-out-there.com" and the big, established sites trying to be number one in their categories or trying to kill off other competitors.
In the first group, some start-ups are spending huge percentages of their investors' money on advertising.
Take Chipshot.com, an online site that sells only golf equipment, including custom-made clubs. The retailer, co-founded by a Harvard sophomore named Amar Goel, who operated from his parents' garage until last year, launched its first national media campaign this spring with more than $10 million in investors' money.
"I'm not sure there was an ad budget last year," said Hani Durzy, a spokesman for Chipshot.com.
Last week, the first TV ads, featuring former football player and scratch golfer John Elway, began running for the site. It had originally planned to spend about $600,000 for TV for the fourth quarter but increased that amount to $3.6 million.
While traditional brick-and-mortar retailers may take in as much as half of their annual revenue during the holidays, Internet sites have found that their customers spread their purchases more evenly throughout the year. Still, it's an important season, particularly for online computer and toy retailers.
For the big portal companies that offer access to a number of different services, the increasing expenditures on advertising are monumental. AltaVista, mostly known as a search engine, will shell out $120 million over 10 months; Cnet, a technology news and commerce site, will spend $100 million over 18 months (that's almost 80 times what it has spent in its seven years of existence); and Yahoo will spend $65 million in just the fourth quarter.
AltaVista, which committed less than $1 million to advertising in 1998, will spend $40 million of the $120 million over the next seven weeks. It is repositioning itself as a shopping and information network as well as a more powerful search engine.
"For us, it's not a life-or-death issue," said Rod Schrock, president of AltaVista. "We are building a long-term, enduring brand on the Internet. The other companies are in a two-month fight for survival."
Schrock said the plethora of Internet ads right now doesn't make it easy. So AltaVista is focusing its "Smart Is Beautiful" campaign on 10 cities that represent 33 percent of the online audience.
Staff writer Leslie Walker contributed to this report.
ONLINE BUSINESSES AS OFF-LINE ADVERTISERS
Online businesses are making their presence known through more traditional media.
Spending in millions, first half of year
Radio, TV, print and outdoor ads
Network television advertising
SOURCE: Competitive Media Reporting